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Buying A Home In Recession

Nov 13, 2007
There are many people who will jump at the chance at buying a new home during a recession. If you are one of these people you are probably well aware of the benefits that go along with buying at this time. But if you are like most buyers, you probably have no idea why a recession may be the perfect time to make a purchase. When it comes down to it, there are some reasons that you may want to look into doing this. First and foremost, most people will tell you that you can save money on a piece of real estate during a recession. Is this true? In some cases, yes! There are times when a recession will bring price decreases of five percent or more. But at the same time, there is a chance that the market in your area will hold steady. So as you can imagine, a lot of the price that you pay will have to do with the market in which you are buying.

Another reason to consider buying a home during a recession is because the deals you can get on new construction. When a recession hits and new construction is underway, developers get put in a very awkward position. While they cannot turn back and stop building, they know that selling these homes can be hard during a recession. So what do they do, you may ask? Simply put, they look into ways that make buying a new home more appealing to consumers. For instance, they may heavily discount the asking price, or in some cases offer a large number of upgrades. This will allow you to buy a brand new home for much less than you would if the market was stable and flourishing.

To some people getting a good deal has everything to do with the money that they pay. But of course, there are others who look at the big picture. When you are buying in a recession you need to consider what a good deal looks like, and what you should pass up for the time being. Being able to determine a good deal from a bad one is based on your own personal expectations. As mentioned above, a good deal to you may mean something entirely different to the next buyer. You should have a checklist of things that you are hoping to accomplish when buying in a recession. Then as you are searching for a home you will be able to move from one point to the next.

Getting a good deal often times is translated by how much money you can get off of the asking price. During a recession, this is a good measuring stick because you should be able to save quite a bit of cash. In most cases, people who are buying in a recession expect to save anywhere from three to five percent off of what they would normally spend. This may not seem to be a good starting point in your part of the country, but you should know that this is what others are looking for.

Remember, buying in a recession is not all about money. Sure, you can save a bit if you find a seller who is willing to give into the market circumstances. But guess what? If you buy a home for a good price, but the property does not suit your needs, you are not really getting a good deal. The only thing you are doing is forcing yourself into something because there is a bit of extra savings available. All in all, you need to make sure that you do not get so caught up in the savings that are available

As you can see, there are some good reasons for buying a new home during a recession. But remember, if you are not ready to buy you should step back and take your time. Sure, you could get a good deal at this time, but if you are not ready you could make things worse in the long run. Buying a new home during a recession can be advantageous, but only if you are 100 percent prepared to make a purchase. Overall, buying in a recession is a great way to get a good deal in the real estate industry. But until you know what a good deal looks like you will have a hard time closing out the transaction.
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