The Credit Market Crash and Your Real Estate Investment Options
There’s been a lot written lately, and this blog as well, about the current credit market crash. The option ARM is just getting in on the action, and the situation is likely to get worse before it gets better. Indeed, even as residential real estate prices fall across the country, commercial real estate prices are feeling the pinch now as well, according to Bloomberg:
“People aren’t willing to do deals right now,” said Howard Michaels, the New York-based chairman of Carlton Advisory Services Inc., which has arranged financing for real estate purchases including the Lipstick Building in midtown Manhattan. “The expectation is that prices will come down.” …
“There are so many deals falling apart,” said David Lichtenstein, chief executive officer of Lakewood, New Jersey- based Lightstone Group, an owner of more than 20,000 apartments and 30 million square feet of office and retail space. “People who can get out are getting out.”
And, some think that a recession is coming. This video on YouTube shows how we got here, and where we are going:
Of course, this doesn’t mean all is lost. There are opportunities to be found in the real estate market right now. If you have the risk tolerance for it, you can wait for real estate prices to come down a little more, keep your credit in good shape, and amass a good chunk of money for a down payment. If you can do this over the course of the next two or three (or maybe even four) months, you should be able to find some real bargains.
And don’t forget the stock market. There are some bargains in building companies and REITs right now. But you have to be choosy. As always with times like this, there are companies that will recover (those are the bargains you want to invest in) and those that will fold. Some carefully considered investing could be a good move right now. But only if you can stomach the risk financially — and emotionally.
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