There are two obvious reasons that investing in Real Estate right now is a brilliant idea. These reasons apply to both the purchase of homes and investment property.
Everyone knows the age-old investment philosophy, “buy low and sell high.” Real Estate investments are taking a beating in the media right now. No one is talking about investing in Real Estate. That means that the demand is down and prices are low. Creating an ideal “buy low” time for Real Estate investors.
Why would anyone be selling now is a really good question with an easy answer. People need more space or they need to downsize, people move for jobs, people retire, people want to cash out, people want cash in, people make bad decisions then need to sell something to pay off debt, just to name a few.
The fact is, that there is currently inventory on the market at good prices and even more inventory not on the market but available if you go looking for it.
At the same time there is growing talk of inflation. It is not just talk. Without going into all the economic factors and indicators, they all line up to reveal impending inflation. What does inflation mean? It means that the price of nearly everything is going up. It means you buy less for your money. Your paycheck buys less. The price of oil and gas is driving the price of everything higher. Your dollar used to buy a loaf of bread. Now it takes a dollar and a half. Inflation spreads to all hard goods.
Between 1981 and 1984 there was a period of rampant inflation. House prices in most of the country rose by fifty to a hundred percent. This was during a recession. Interest rates were at those record highs you always hear about, 15% to 20%. And house prices rose dramatically.
A loosening of lending restrictions that created a flurry of home buying followed that period which drove prices even higher.
A loosening of lending restrictions that created a flurry of home buying followed that period which drove prices even higher.
Is this beginning to sound somewhat familiar? Instead of the high interest rates driving up inflation and creating the demand it is the cost of fuel, tightening of lending criteria, and concern over the liquidity of the secondary market wholesale buyers of mortgages that is creating pent up demand. That, fueled by inflation should create a significant increase in home values.
A strategy to winning in this market is to become savvy enough to understand that this is very likely a perfect time to be buying property. Real Estate investments are taking a beating in the media right now. No one is talking about investing in Real Estate. That means that the demand is down and prices are low. So the first obvious reason that investing in Real Estate now is that prices are low.
Remember this, Real Estate markets are cyclical. They always get better and they always get worse. (source of information for this post:BrokerAgentProfessional, an independent Real Estate Publiction).
It is only a Buyer's market if you buy!
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