What Happens In A Real Estate Recession
The number of houses on the market GREATLY exceeds the number of
potential buyers. What does this mean? A nationwide recession for
the real estate economy. However, the situations have become so poor
in San Diego and Miami that many are expecting a full blown
depression causing mass panic in terms of investing.
Real estate investors who were really taking in the money during the
high times are now seeing the market at rock bottom. Many real
estate investors have given up real estate investing and have turned
to other investments. However, there has actually never been a
better time to invest in real estate than right now, for two
The first reason is that a real estate recession causes homes to
decrease in value. They will increase again, but it will take a few
years. In the meantime, a smart investor who is looking for a long
term investment, can purchase real estate and either rent it out to
other individuals who need a place to live or live in the property.
If the property is vacant land, it can just be left alone. There is
much more real estate for sale than there are buyers. This means the
prices are lower than if there were more buyers than homes. Take
advantage of this fact and buy something.
The second reason why this is such a great time to purchase real
estate is because of the low interest rates. The interest rates for
mortgages have never been lower than they are right now. And because
people are not buying homes and have pretty much saturated the
refinance market, lenders are desperate to make loans. If lenders
cannot make home loans, they go out of business, plain and simple.
They are willing to make a lot of deals that they were not willing
to make 20 years ago. Even people with less than stellar credit can
get home loans, so if you think your poor credit is going to stop
you from getting a home, think again.
Smart investors are thinking of this market as a reason to purchase.
Real estate is a tangible asset and something that everyone needs.
We all need a home. If you do not want to live in the home yourself,
you can rent the property to other individuals. If you choose to
rent to tenants, you might want to institute a rent to own policy in
which part of the rent the tenant pays you goes towards the down
payment of the property when the tenant is able to purchase the
home. There is a time limit on this and this gives a tenant more of
an incentive to pay their rent on time as well as take care of the
If you are looking for a home in which to live, this is a great time
to buy. You can get a lot more bang for your buck, especially in
upscale neighborhoods that were hit hard by the recession. And
because the interest rates are so low, you will be shocked at how
much you are able to afford. A real estate recession is tough, but
this is a good time for smart investors to buy low and wait out
their investment for the long term.
Back to San Diego downtown real estate article index