Last Christmas Eve, the Dow Jones Industrial Average plunged to 21,792, a low not seen in over 15 months.

By July 10, this leading stock market index breached the 27,000 mark for the first time to close at a record high 27,088. A month later, it was had fallen below 26,000.

On Friday, Aug. 23, when the stock market closed for the day, the Dow was at 25,628.90 – a decline of almost 6 percent in five weeks.

In between, it roller-coasted hundreds of points in a matter of days.

This volatility, plus trade wars, geo-political disputes, soaring deficits and something called the “inverted yield curve,” are leading many economists to predict a recession in the coming months. This is despite a strong dollar, a growth rate of about 2 percent and low unemployment numbers.

According to a recent survey of more than 200 members of the National Association for Business Economics, 40 percent of economists, strategists, academics and policymakers believe the United States will enter a recession this year or next. An additional 25 percent predict a recession in 2021.

For many, the word recession conjures memories of the plummeting home prices, foreclosures and short sales of the 2008 financial crisis.

But recessions come in different sizes and forms, and develop from myriad causes.

The 2008 downturn has been blamed on unsustainable, poorly regulated lending practices on a massive scale – particularly in the real estate market.

When the recession hit, it hit the housing market first, hit it hardest and impacted it for several years past the nadir.

But the past does not necessarily predict the future.

"This is going to be a much shorter recession than the last one," said George Ratiu, senior economist with realtor.com. "I don't think the next recession will be a repeat of 2008. ...The housing market is in a better position."

While the next recession may not be based on the real estate industry, it will certainly have an impact.

Real estate accounts for 15 percent of national GDP (gross domestic product, a monetary measure of the market value of all the final goods and services produced), so it is clearly a major factor.

And folks who are worried about job security, increased costs of imported goods, and the stability of their retirement accounts may be less inclined to purchase new homes.

Nationally, sales of existing homes climbed 2.5 percent in July, led by the West. But foot traffic – the number of would-be-buyers out looking for property – was sluggish. Foot traffic tells us a lot about what sales will look like in the near future.

“Home showings remained flat in July despite lower interest rates, as potential buyers appeared to have become more cautious given current economic conditions,” according to the National Association of Realtors.

“After achieving the longest economic expansion in the U.S. history and growing a solid 3.2 percent annualized rate in the first quarter of 2019, which way is the $19 trillion income-generating economy headed?” Laurence Yun, chief economist for the N.A.R., wrote on a Forbes post in July. “Not as strong.”

“Constant trade war rhetoric” has had a negative impact on business, he said. Uncertainty has made corporations less inclined to make large capital investments.

“One caution is that slower activity of exports and imports have in the past correlated with a slowing economy,” said Yun. “If businesses cannot operate in the most efficient manner as they see fit, then the economy slows.”

One key area for future growth is real estate.

“Rising home sales and increased housing starts have nearly always been associated with economic expansion,” he noted. “More home sales also mean increased number of Americans who can participate in wealth gains. Consequently, consumer spending, including vehicle sales, can turn higher.”

The very low interest rates we have been experiencing for the last several years have allowed people to purchase more expensive homes than they might have thought possible, modifying the effects of higher prices.

“During the last nine years, the expansion has created more than 20 million jobs, raised family incomes and rebuilt consumer confidence,” said Frank Nothaft, chief economist of CoreLogic, which tracks and analyzes financial, real estate and consumer information. “The longest stretch of mortgage rates below 5 percent in more than 60 years has supplemented these factors. These economic forces have driven a recovery in home sales, construction, prices and home equity wealth.”

In the Bay Area, as well as throughout the United States, housing construction is still struggling to keep up with demand, with an annual national shortfall of 300,000-400,000 new homes. That shortfall has kept home prices high.

That shortfall — combined with the mitigating effects of low interest rates — leads many experts to predict that although demand for property at the upper end of the market may soften a bit, houses at the lower and mid-level price points will hold their value.

“We’re probably in the strongest housing market in the history of our country,” said Barry Habib, a well-regarded mortgage industry professional and CEO of MBS Highway. “So if there’s a recession, real estate is probably still OK.”

Theoretically, when prices get too high, folks stop buying. But with interest rates ranging from low to very low, people are able to pay more because their monthly payments remain affordable. This has been true for the last several years, and more so in the past few weeks as mortgage interest rates have fallen.

Habib is predicting “the lowest rates we’ve ever seen” for the foreseeable future.

Boyd Robinson, a senior mortgage advisor with Welcome Home Funding in Livermore, agrees.

“The silver lining to all the market volatility that the economic markets have been recently experiencing is an unexpected drop in mortgage interest rates,” he said. “Prospective home buyers are finding more buying power, and current homeowners are able to reduce their monthly housing payments as a result. It remains to be seen where rates will go, and if they drop any more as a result of Executive Branch pressure on the Fed. But for now, this is the best time in years for low interest rates.”

If you are thinking about buying or selling real estate, contact your local Realtor today.

Cher Wollard is a Realtor with Berkshire Hathaway HomeServices in Livermore.