Investing In Real Estate In A Recession
We all have these pictures in our heads from the days of the great
depression. Solemn hungry faces on once filthy rich families, tired
worn out elderly without homes. One might think investing during a
recession is very risky. But, we have to remember that real estate
is far from any other regular old investment.
Real estate is one of the few investments that we actually not only
can use, but need. Basically everyone just needs a place to live.
And real estate has systematically proven to have risen in value
over the past several decades. Yes, you are paying interest in a
mortgage for your home, but you are also getting a tax write off for
the interest as well as a write off for any property taxes that are
The mortgage rates have not been as low as they are now ever since
the 1960s. This is the ultimate time to purchase real estate and
take advantage not only of the low interest rates, but also the low
prices on homes. Because there are so many more homes on the market
than buyers, the price of homes in most areas has fallen
considerably. On top of that, people who overextended themselves in
the early part of the century are finding themselves in foreclosure.
Now is the time to buy and buy cheap. Do not feel intimidated by a
real estate agent who tells you that you are going to “insult”
someone if you offer a low price for a home. The real estate agent
wants you to spend as much as possible because they get a commission
off of the sale. Use your head and take a look at the market. When
you are buying a home in a real estate recession, consider the
Is The Home In Foreclosure?
If the home is owned by the bank, you should be prepared to present
a lot less than the asking price. Do not allow a real estate agent
to sway you when it comes to making an offer. If they use any tricks
such as “I do not want to present such a low offer,” tell them that
you will find someone else who will. Real estate agents are a dime a
dozen, especially in the market today. If the home is in
foreclosure, offer at least 20 percent less than the asking price.
How Long Has The Home Been On The Market?
A few years ago, a home that was on the market for several months
was either priced too high or there was something significantly
wrong with the home. Nowadays, homes stay on the market for 90 days
as a matter of routine. Never make a really low offer on a home that
is fresh on the market unless you know the home is in foreclosure or
about to become foreclosed upon. Feel free to make low offers on
those homes that have been on the market for a month or so. Those
that have been on the market for a year are owned by people who are
willing to wait out the storm and will most likely not be sold for a
Why Is The Owner Selling?
You can find this out by directly asking or looking around. If the
home is in a condition of disrepair, chances are that there are
financial problems. You can offer a significant amount less. If the
owner has another home that they are buying, you can also offer
Make sure you do your groundwork and do not be troubled to invest
during a real estate recession. Contrary to what you may have heard,
this is the best time to buy a home.
Back to San Diego downtown real estate article index