As The Real Estate Market Falls, Are There Bargains To Be Had?

For the past few years, we saw house prices rise all over the U.S. It definitely seemed to be a seller’s market. But now we are seeing a change, and a big change. The U.S real estate market is experiencing some difficult times at the moment with prices steadily falling. The main cause of this is the sub prime market. This is a high risk market where lenders lend to people who have a poor credit history. Their interest rates are higher to cover the higher risk of the loan, so as interest rates start to rise, and people borrow more and more, the sub prime market is the first to be hit.

People with poor credit ratings who don't pay their bills are going to be the first to cause problems for the housing market. Those who bought homes out of their price range are also beginning to water down the market. The older generation are opting for community housing, and even apartments, where upkeep is virtually nonexistent. They’re dumping their mortgages and adding to the tide of available houses which is in turn adding to the problem. This, experts predict, could be the beginning of a huge opportunity for people prepared to buy real estate.

As the prices fall from the recent real estate boom, this could be the means to lower prices for investors. Basic principles of investment – buy it for less, sell it for more – still hold true. But if housing prices in the U. S are dropping, how long will this trend last? and is it still wise to put your money in real estate? All business trends see peaks and troughs. Real estate, however, is REAL. It has tangible value that may have momentary dips but will always rise in the long term. Well it always has before. Still, smart money managers are finding property that has plenty of potential and is still cheap enough for its purchase to make sense.

The real bargains are to be had in for sale by owner property. This property tends to be available at less than you would buy from a real estate agent as their commission is not on top of the asking price for a start. You can always haggle a little bit more too when you are buying direct from the owner. But invest wisely, and invest for the long term, short term profits are not always guaranteed in a falling market, even if you are buying at below market value.