Real Estate Investing – When is it Safe to Buy
The question on most everyone’s mind these days is when is it safe to buy again? It affects regular home buyers as well as those in real estate investing. Most of us want to try to do real estate timing because we don’t want to lose money right away. Of course the answer to that question varies depending on where you live and what you plan on doing with the property once you buy. I’ll talk about exit strategy in another post.
Real estate markets are local. No matter what you see in terms of national stats they really don’t mean anything for your local real estate market. Local markets are affected by things like local home sales, local new construction and local employment. One area in the country can be going up, while another area can be going down. In fact, that is exactly what is happening right now. There are a lot of areas going down right now, but some are either flat or going up. That means that in some places it is already safe to buy. Of course, all we hear about in the news is how every place is going down. Or they’ll try to run some headline about how the recession is over, but if you live in one of the areas that’s going down I imagine you find those pretty hard to believe. That’s certainly the case where I live – where home prices have dropped another $15,000 in the last few months.
So the answer of when it’s safe to buy again depends on your local real estate market. The only way to really know is based on what the market indicators look like in your market. Is the market momentum showing a recovery or is it still saying to wait. Obviously you don’t want to buy if your market is still going to drop by tens of thousands of dollars more in home prices. You’ll wind up massively upside down within a couple of months. I think it is definitely worth asking the question of when it’s safe to buy. After all really knowing when to buy and when to sell is the essence of successful real estate investing. This is one of the great things about the real estate market analysis charts at REMarketStats. You can ask the question of when is it safe to buy again and look at the charts for your area or other areas you want to do real estate investing in and find the answer in the real estate timing charts.