The Long View on Real Estate

The nature of an economic crisis is such that we tend to focus on the sky falling in the short term and miss out on long term opportunities. The current status of the real estate market is one such situation.

Owning a home during the last three years has been a depressing affair for most people. The vast majority of markets have seen prices plummet like a lemming running off a cliff. It hasn't been pretty and I am not here to lie to you. The immediate future isn't suddenly going to be rosy. Things will turn around slowly for the next few years, but what about the long term?

Let's do some basic math. The population of the United States is expanding. People need places to live. It is as simple as that. Market forces are such that they can sway the situation for a short period of time. Keynesian efforts by the government to prop up real estate through things like the first-time homebuyers tax credit are nice and all, but the market will truly recover only when demand turns around.

The short term question you undoubtedly have is when will this occur? Nobody knows and anyone telling you that they do is a blowhard. If markets could be accurately predicted like that, the predictors would be wildly wealth and not giving out free advice! The current crisis is such that we might see a mild turn around tomorrow...in a year...or in three years. It is hard to imagine a full blown recovery in housing until employment figures start to improve, but even that is not a definite indicator.

So, what should you do? Well, the answers are fairly obvious. Real estate will recover in the long term. It might take five to seven years, but values will bounce back up. If you are considering buying now, there has never been a better time. You can buy cheap and ride the appreciation freeway all the way up in a few years time. If you own now, just hold on baby! Values will turn around and you will get your equity back.

It can be brutally difficult to think long term in an economic crisis. When it comes to real estate, however, you must as there really is no other plausible choice.

Author :

Raynor James writes about issues faced by FSBO sellers for FSBOAmerica.org where you can list your property for sale by owner for free for 1 month.

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