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Everything You Should Know About Investing in Property During a Recession

Posted by admin on November 16, 2020
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Housing Market

As we are living in uncertain times as a result of the ongoing COVID-19 pandemic, we must be able to adapt to what is known as the “new normal” regarding how we live our lives.

While there were fears of experiencing another economic recession due to the mandated lockdowns, many questioned whether or not this would affect the housing market, namely the value of property. Luckily this time around, the housing market is one of the few areas that hasn’t taken a significant hit yet, showing us now that therein lies tremendous investment opportunities that are too good to pass up.

The Edinburg owner-financed property specialists of Santa Cruz Properties would like to go more in-depth about how a recession can impact the overall value of a property and explain some of the positive outlooks to investing in land during such times.

What is a Recession?

Recessions happen when a significant decline in economic activity occurs, which can lead to low-to-no profits, employee layoffs, bankruptcies, industrial output, and lower consumer spending.

These events can occur for a variety of reasons such as natural disasters, global pandemics, historical events, stock market collapses, etc. More specifically, an economic recession could lead to:

  • A decrease in the gross domestic product (GDP)
  • Stock market halts or crashes.
  • Tougher bank loan, mortgage criteria
  • Lower mortgage rates

Recessions Affect on the Housing Market

For the most part, it is very unlikely for an entire housing market to experience a recession of their own simply due to the fact that these markets are local rather than national.

However, there are certain things that may occur such as longer closing periods, foreclosure increases, and declining home values. These aspects can essentially set up a golden opportunity for aspiring property owners to invest in their very own piece of land, property, or lot.

Benefits of Investing In Property During A Recession

While recessions can impact the entire country negatively, they open the door for aspiring property owners looking for real estate opportunities. Some of the most notable reasons why recessions can be a great time to invest in the right piece of property include:

  • Lower Interest Rates: As a result of a recession, the Federal Reserve tends to adjust to decreasing interest rates in order to encourage individuals and companies to continue investing, as well as give room for credit-building opportunities. This essentially opens the door for investors to go in on a property as the overall cost decreases because of lower mortgage rates.
  • Lower Home Prices: In order to adapt and survive an economic recession, a property seller might be forced to drop their prices in order to attract prospective buyers. If the selling cycle is halted or virtually non-existent, sellers would be willing to list their properties at a bargain price in order to avoid waiting long months to sell.
  • Less Competition: With fewer individuals looking at the property during a recession, it can ease the pressure off of prospective buyers so that they can carefully evaluate their choices of property and put in a reasonable bid, rather than trying to outbid a competitor.

Santa Cruz Properties: Your Owner-Financing Experts In Edinburg

When looking into investing in your very own piece of property, it would be in your best interest to go through the owner-financing route to get the most out of your long-term investment. Owner-financing essentially eliminates any middle-man and lets the buyer work directly with the seller, meaning flexible down payments and faster acquisitions.

The Edinburg owner-financed land experts of Santa Cruz Properties pride themselves on making aspiring landowners’ dreams a reality. Not only are our wide selection of properties diverse in specific types and sizes, but they are also very affordable with our owner-financing programs.

Don’t Let a Recession Interfere With Your Dreams of Land Ownership. Contact Santa Cruz Properties Today for a Place to Call Your Own.

Invest in Your American Dream Now

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