DEFINITION of 'Depressed'

A state or condition of a market, product or security characterized by slumping prices, low volumes, and lack of buyers. "Depressed" usually refers to a prolonged period of low prices and activity. The term may also be used in the context of the broad economy, in which case it generally refers to recessionary conditions.


A period of depressed prices for a market or security usually occurs after prices have run up, peaked and subsequently declined for a prolonged period. Prices may remain in a depressed state for months, if not years, depending on the extent to which they had rallied beforehand and the amount of over-capacity or excess supply.

As an example, the U.S. housing market was in a depressed state for a number of years from 2008 onwards, as excessive real estate speculation led to a housing bubble in the preceding years. When the bubble burst, millions of homeowners were forced into foreclosure, creating an excess supply of homes that lasted for years.

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  3. Depression

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