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Why You Should Buy Properties in a Recession

Posted by Jeremiah Williams on November 30, 2016
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Real Estate and recessions are never really at par. The recession comes with hikes in the prices of just about anything, except stock market prices of course; it is usually the last period anybody would want to break the bank and spend money buying properties. It almost seems ridiculous, even. Unknown to many, this is actually the best time to purchase properties. As it is very unlikely for people to buy homes or build in this period, the demand for them are comparably low. We all know that when demand is low, price falls.

To succeed as a realtor or to even secure a good home for minimal cost, you have to be prepared to think out of the box. You see, as established, recessions are not periods where money comes easy. Lots of businesses fall out, big spenders cut-down their expenses, and, believe it or not, people sell off assets that have taken shape as liabilities. With the money not coming in as expected and the chips are down, more non-money making assets would be sold – including properties.

What we then have during a recession is low demand, and high supply. When supply exceeds demand the price not only falls, but you stand a higher chance at winning a negotiation or bid that wold ordinarily seem absurd. This may not be so in all cases, but you certainly stand a better chance at getting a good deal in a recession. The prices or houses and properties in general tend to rise over time, so this would serve as a great investment.

Of course, you would need to be careful here. Buying when the recession is just starting and prices are expected to still plunge would not make much economic sense. Essentially, it is best to watch the market and see if the recession is expected to go on much longer – much longer being beyond five years. Unless it is the great depression, it most likely would not. In essence, a boom is coming, and you want to be on the disposing part of the market or at least not a buyer – as prices would rise again. So if you are lucky to be liquid enough to buy a property during a recession, you should go on with it.

Written by Lawretta Egba of lawrettawrites.com