In economic terms, what is a 'recession'?

A recession is characterized as a significant decline in economic activity across the economy that lasts for a prolonged period, typically recognized as two consecutive quarters of negative GDP growth. During a recession, various economic indicators, including employment levels, consumer spending, and business investment, tend to decrease. As a result, demand for goods and services plummets, which often leads to a decrease in property values since people may be less inclined to purchase homes or invest in real estate. The interaction of reduced income and consumer confidence can further exacerbate the situation, leading to lower demand in property markets specifically.

In short, the correct understanding of a recession includes its impact on the economy—most notably, a decline that can have a cascading effect, ultimately decreasing property values and the demand for real estate, which is a fundamental aspect of economic conditions during such a period.