22 January 2008

Recession and Real Estate

We have started hearing about recession worries over the past few weeks.  Recessions are, and should be, a genuine concern for our economy.  When we are in a recession people have a tendency to slow down on spending due to real or perceived financial concerns.

The positive impacts of a recession, at least on our own personal levels, is that we will scrutinize our spending behavior and not splurge or impulse buy as much as we might during a booming economy.  The habits and lessons we learn during the recession can serve us well during a booming economy if we take them to heart.  Personally, I think we should be prudent and conservative with our finances regardless of media input or economic indicators.

There are some things that are smart buys during recessions and should be considered.  Although you may not see sticker prices drop on new cars, you may see rebates get larger during a slower economy.  You may also find you get lower financing rates as lenders and manufacturers use the lower financing as a tool to stimulate purchasing.

With the recent issues in the housing industry constantly on the front page of the paper and as a lead story in Saturday morning economics shows, we have seen the mortgage rates creep back down.  This may not cause a refinance frenzy the way it did a couple years back because many current home owners already have a low rate, but it is an excellent opportunity for current home buyers.

If you are in a stable industry or are confident in your current job, this is a great time to be buying a home.  Media continues to push the "fear" button and this keeps many people out of the home buying process.  I actually heard a "professional" on one of the recent Saturday morning shows state: "no one should be buying a home right now.  Home prices aren't expected to rebound until late 2008 or sometime into 2009".

I found myself asking - literally out loud: "Why would you recommend people wait until home prices rebound to purchase a home?"  If you think about it, the so called expert actually told the nation to wait until home prices are proven they are higher before they recommend you buy.  I don't know about you, but I kind of like the idea of buying while the home prices are low.  I'm not going to wait around until home prices have proven to have gone up 5% to make a purchase.  On an average Kingsland or St. Marys home (around $165,000 - $180,000) that is an increase of nearly $9,000 in purhase price or, at current interest rates, an increase of $54.00 per month in house payment.

If you are looking for long-term housing that you plan on living in for 3 years or more, then low home prices are a great opportunity for you.  BUY!!!!!  On the other hand, if you are looking for housing and are afraid what the value may be in twelve months when you move out of that property, you should NOT concern yourself with house sale prices but you should focus on what you can pay in rent!

For homes for sale visit http://www.royal-skies.com

For rental properties visit: http://www.royalskiespropertymgt.com

If you are considering selling your home and need information specific to listing visit: http://www.YourHomeListingSpecialist.com

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# DON LANTIER said:

Don from Smyrna, Georgia here.

Very insightful post...love to see other bloggers on Point2 help buyers see why NOW is a good time to buy!

Regards

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