When Will the Economy Recover From Coronavirus? [Press Release]

Rich Fettke


RealWealth Surveys 49,000 Members to Predict Economic Recovery Expectations

In past recessions, fewer people were able to qualify for mortgages due to job losses or bankruptcy and instead were forced to rent. RealWealth expects rental demand to increase over the coming years to meet this demand. Given the shortage of affordable housing over the past few years, property managers within our network have seen an increase in rental applications this past month – especially for single family homes that provide a more desirable “shelter in place” during social distancing to stop the spread from COVID19.

The Coronavirus pandemic / COVID-19 has had a major impact on trade, jobs, travel and the economy. Because of this, we reached out to our wise members, to help us predict what this economic recovery might look like.

The survey asked members to review three types of economic recoveries from history, V-shaped, U-shaped, and L-shaped. Then predict which recovery period they expect to see following the pandemic. 

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Here are the findings for what type of economic recovery is expected:

24% believe we will see a V-shaped recovery, meaning an economic recovery within 6 to 12 months.

While 52% believe we will see a U-shaped recovery, meaning an economic recovery within 12 to 24 months.

And 24% believe we will see an L-shaped recovery, meaning it will take more than 24 months for the economy to recover.

V-Shaped Recession – 6 to 12 months

In a V-shaped recession, the economy suffers a sharp but brief period of economic decline with a clearly defined trough, followed by a strong recovery.

Image Highlighting V-shaped graph recession
The Recession of 1953 in the United States is a classic V-shape

U-Shaped Recession – 12 to 24 months

A U-shaped recession is longer than a V-shaped recession, and has a less-clearly defined trough.

Image Highlighting U-shaped graph recession
The Recession of 1973–1975 in the United States could be considered a U-shaped recession

L-Shaped Recession – Over 24 months

An L-shaped recession or depression occurs when an economy has a severe recession and does not return to trend line growth for many years, if ever.

Image Highlighting L-shaped graph recession
The Japanese asset price bubble led to a lost decade in Japan; this period has been characterized as an L-shaped recovery.

Summary of Findings:

V-Shaped Recession – 6 to 12 months: 24%

U-Shaped Recession – 12 to 24 months: 52%

L-Shaped Recession – over 24 months: 24%

Total survey participants: 525

For more information, visit our website, become a member (it’s free!) and stay-up-to-date on economic and market trends. 


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