HOUSING MARKET'S WOES SPELL OPPORTUNITY FOR SOME

Filed Under: Catskill NY Market Trends | Upstate New York Realtors
Written By: Jamie Hollier

It seems that the last decade was a hey-day in the real estate industry until recently. Everyone is talking about the downturn in the housing market, with some even using the dreaded term "crash", and this has buyers and sellers scared. Granted, this situation is making it a lot harder to sell your home for what you would like to get out of it, but that simply means the pendulum is swinging from a seller's market to a buyer's - and it's often just part of the cycle.

Four major things contributed to the housing situation that America now finds itself in: quickly escalating real estate values that made people feel pressured to buy, predatory lending methods that got people into homes that were beyond their means, a rise in speculative real estate purchases (the ones looking to flip homes), and overbuilding. All of these events, especially when considered together, demand that a correction in the market take place after a while to offset their effects. This correction, however, is just that, a correction. Although a crash is never impossible, this is an improbable time for one. People are still buying and selling, interest rates are still at record lows, and real estate has historically been a good long-term investment.

The fact that prices are low, there is a high supply of homes and housing options, and interest rates are at record lows means a great opportunity for many. There are a few things to consider if you are thinking about buying now. Home prices have fallen and may continue to fall, but if history holds true you will not end up with a negative gain on a home if you keep it more than seven years. Also, interest rates are so low right now that any home buyer that can afford to put down 20%, has a decent credit score, and can afford a loan with a fixed interest rate, is looking at a good deal as far as mortgage payments go.

For those that can afford to invest in real estate right now, another consideration should be the market in the areas you are considering. California is getting hit harder than most areas with the downturn and the large fluxuations in prices there should be a sign to steer clear until it settles down a bit. Areas like the upstate New York real estate market, however, seem to be holding pretty steady for second homes, especially if you are considering Catskills real estate.

Investing in real estate can be a lucrative decision, but it can also be risky and turn out badly so there are a few situations in which real estate investments are not the right fit for you. If you are currently facing a high debt situation in your financial picture, paying that debt down is often the better option than investing. Also, if your job situation is the least bit shaky, don't get into a situation where you are dependant on that income every month and have no safety net.