Is This the Right Time to Buy a House When the Economy is Down?

The subdued activity in the housing market continues to give nightmares to economists and policy makers, but it actually presents you with a good investment opportunity for your retirement or big future expenses like your children’s education. The time seems right for investing in a home, because the prices are still low following the crash in the housing market.

Why is now a good time?

Following the housing crash, a record number of good properties are facing foreclosure. This means that there are many homes available at low prices as the original homeowners cannot afford the mortgage payments any longer.

Interest rates are yet to start moving upwards. Take advantage of the subdued rates by taking a loan to buy a house now – the low rates wouldn’t be here forever. In the long run, you will end up paying significantly lesser for your home.

The high number of foreclosures has left many without a home. These erstwhile homeowners will be looking for good rental options, which is why you stand a good chance of finding tenants quickly.

No one can deny that this could be a great time to buy a house, but you still have to keep a few things in mind before you sign a deal.

First of all you should be investing for the long term. Do not expect significant gains in the short term with your home investment. Home values will take a while to get back to higher levels and you can make a good profit only by holding on to your property patiently.

Look for a good neighborhood. Properties in good neighborhoods, which are well planned and have easy access to schools or hospitals are attractive to prospective tenants and draw higher rents.

Before you buy a house, insist on an inspection and check for major problems like water leakage or sewage blockages. Ensure that the home has been well maintained and is in good condition. If you will need to put in some work after you buy it then negotiate for a lower price to make up for the costs.

With some smart thinking and patience, you can make a really good real estate investment in the current market. The price is right and the economy is improving, so you can make the best of the circumstances with an investment now.