For the past several years, the housing market has been mutually beneficial for both buyer and seller. The cost of real estate has risen but has maintained or gained value. People who have owned their home for quite awhile are seeing astronomical amounts of money to be made off the sale of their home, and so the market has been inundated with housing for sale. It leads us to wonder whether this boom is heading for the crash. Is now still a good time to buy? If so, what type of property will continue to gain value? Will new buyers end up stuck in their home as the value drops?
As a homeowner, I am nervous about the state of the real estate market. This is not the house my family wants to call its home forever, but could we get stuck here? Yes, we could. If the housing market drops, then so will the amount of money we could potentially make off the sale of this house. If it drops enough then it would be possible to end up owing money upon the sale. Unless you are independently wealthy, you hope to make money off the sale of the home to help finance the purchase of the next home.
Real estate agents will tell you that now is still a good time to buy. While it is speculated that the market will drop within the next year or two, if you are willing to sit on your new purchase for several years, an upswing will occur again. There is never any guarantee that you will recoup the money paid for and put into a home.
If you intend to purchase a home soon, it would be a good idea to buy something you can see yourself living in for several years. Another idea is to purchase a multi-family home that can provide a living space for you and a tenant to help pay the mortgage. If after several years, the market is still not great, then rent out all available space and see some income from your property. This can be a great money making opportunity if you are willing to invest the time that is required of being a landlord.
The same idea can be used for purchasing a condo or townhouse. Those are generally much less expensive than single-family homes and much easier to rent out. The bonus with renting out a condo or townhouse after several years is that as a landlord, you are responsible for much less than if you owned the land and building. In some cases, the condo association also maintains the roof and windows. This can be a good investment whether you choose to rent or sell since many people choose to move into condos when they move to a new city, and young people starting out generally head into the condo market because it is at their price level.
A single-family home may not be the best option for real estate right now. With the market ready to drop, a single family home has the most potential to lose value. This is not a concern for those who plan to live in their home for years or for the rest of their life. However, this is not a good short-term investment for the current housing market.
The current real estate market is favoring sellers, not buyers. This is not a good time to make short-term investments in real estate. The market has been in an upswing for years with it dropping slightly recently. It is inevitable that within the next few years, the market will crash and people will lose money on their investments if they had planned on cashing out. For these reasons, it may be the best to invest in a condo, townhouse, or multi-family home that can be rented out and garner a profit. As with everything, there will be an upswing in real estate again. Unfortunately, there is no predicting when this will occur. If you choose to purchase property, then be wise with your real estate investments over the next few years.