You can see the tell tale metal Foreclosure and For Sale signs swinging from front lawns on nearly every corner of urban America these days as the real estate market continues to plunge and the Feds are stuttering over the word recession. By any means, most homeowners and investors are scrambling to keep it together, wondering when and if the market will ever level out. Most homeowners are holding on to their affordable homes and those stuck with the overpriced adjustable mortages are bailing ship in an effort to recoup some of their losses.
Most are accepting the notion that irresponsible lending, consumer overspending, and a truly swollen real estate belly led to the current upheaval of the system but few are comfortable putting a date on something better than over the rainbow at the moment as to when it will level off. Picking up a profit is as forecasted as finding the pot of gold as well.
Will a new president shift our economy? More than likely, and both democratic and republican candidates are hammering out agendas specifically geared toward raising us out of our slump. But these things take time and with an eye on getting troops home, it is going to be important that both lenders and consumers work a lot of the problems out themselves.
Investments, meanwhile, should focus on secondary homes to fix or rent. With many people downsizing both their square footage and their mortgage, more and more people are opting to rent while the economy settles down a bit. Buying a first home, unless necessary, should not be considering and holding tight to a good home now is crucial. Investing in foreclosures and auctions are good for rainy days still far off but rentals are going to pick up speed during the down slide and a good landlord with some tenants serious about buying a home one day again, will both benefit from the arrangements.
When the economy does shift for the better, investors should not expect to quickly raise interest rates and be more responsible custodians to the consumers. Good financial planning and partnership will lead to a shift in the housing market long before the politics are over.