(This is a continuation of my December 2015 article, “Is there another real estate collapse on the way?”)
Prior to being “licensed” in real estate and as an auctioneer, I was buying distressed properties with nothing down deals, fixing the property up or negotiating a short sale with the lender, and selling them for more than I had in them. My children and wife hated this aspect of the business because they were my painters and cleaner uppers. What repairs I could not do myself, I used contractors.
Things were going fairly well then 2008 hit with the “real estate bubble” popping big time. Prior to that time, if a buyer could breathe and fog a mirror, they could get a loan. Well.. as you know, things have changed. Or have they really?
While banks have required more of a down payment and higher credit scores to qualify for a loan today, there appears to be some concern in the financial markets as to what may be on the horizon, viz., another real estate bubble via a recession. Adding about eight or nine trillion dollars to the national debt in the last eight years or so, have cause concerned to many in the financial market as Congress continues to kick the can down the road. The end of the road may soon be in sight.
According to International Business Times, “U.S. stocks are having their worst start ever to a new year, causing anxiety to spike and memories of the 2008 recession to resurface. Some pundits are speculating that the U.S. economy is heading for another downturn, but others are skeptical of that prediction. ”
There are certainly some worrying signs. Economic troubles in China are threatening to slow demand growth worldwide, while analysts are expecting a recession in U.S. corporate profits this earnings season, and the manufacturing sector is contracting.
I continue to get questions like these: “Do you think real estate prices are going to fall anytime soon?” (They already have in some areas.) Or, “Is there another bubble in the making?” Or, “Is it a good time sell or buy real estate?” If I knew the answers to these questions, perhaps I would be like Donald Trump, financially speaking that is.
If we are heading for a recession, one of the advantages of buying in a major recession is to take advantage of the situation most famously described by Warren Buffett: you don’t know who is swimming naked until the tide goes out. When we are two years into the next recession, we will be able to see quite clearly where the tide has gone out.
With the Democrats wanting to raise taxes and the Republican willing to spend more until a day of reckoning, I would say now is a good time to sell. You may want to wait for the next recession to hit if you are looking for investment property. If you are looking to purchase a residential home for yourself, there are some good buys out there. We are finding more and more motivated sellers.
Looking to buy or sell, give us a call at 252-257-4822 and let’s talk or go to http://www.cansellnow.com and browse our website. We cover the state of North Carolina from Mateo to Murphy.