With all the talk of a possible recession, people losing their homes, and the “housing bubble” bursting, it’s enough to make you think the world it coming to an end. Well not literally, but really, it isn’t as awful as some can make it out to be.
Throughout the rise and peak of the housing market, many economists predicted this adjustment and warned against the risky lending of the mortgage companies. Just as with the stock market collapse in 2000-2001, the housing market will rebound, and potentially be stronger than ever. Our population is only growing, and people will continue to need homes. Every dark cloud has a silver lining, even during a housing collapse, as these positives show:
Already, there are positive elements emerging from the rubble. Interest rates are the lowest they’ve been in a long time, and what better time to purchase a home for the first time? Not only are interest rates low, but the large amount of homes on the market are creating a “buyer’s market.” Sellers are lowering prices, and many are quite motivated to sell. If you’re a first time homebuyer, prices are finally becoming affordable.
Did someone mention very low interest rates? Maybe it’s time to look into reducing your monthly mortgage payment and refinancing. Another option is to draw out an equity line. Consolidate your debt, and maybe have some left over for those renovations you’ve been putting off. Many lending institutions offer no-fee equity lines.
With the stock market so turbulent, and some banks suffering, maybe you are looking for a more stable place to invest your savings. Real Estate has always been something “tangible” to hold onto; and with the high rate of foreclosures, many people are going to be looking for a place to rent. Find a great buy, fix it up, refinance and remove your money, and then rent it to cover your payment. When prices recover, you will find yourself building equity while having an income producing asset.
If you take a peak back in history at the Great Depression, you’ll find that there were many people who invested in the stock market when it was low, and eventually made their fortune when the economy rebounded. John D. Rockefeller said during The Great Depression. “These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again.” As was evident with the booming post-war economy, and the success our country has enjoyed since, he was right.