If you waited to buy a house because of the recession, that was a very smart thing to do. The recession caused many homeowners to seek out options to keep their homes under the Home Affordable Modification Program, or HAMP, or they lost their homes because they lost their jobs and their incomes. Although it was a painful time for many families, it did bring to market many homes for sale. Here are several reasons why it is good to buy a house in the aftermath of a recession.
Recessions Drive Real Estate Prices Down
Just like everything else, the cost of real estate was forced to drop during the most recent recession. Because very few people could afford to buy a house or keep the houses they had, real estate agencies had to lower the prices on many properties just to keep their businesses afloat. When interest rates on first-time mortgages are at an all time low and a recession has driven down real estate prices, you are in an ideal position to purchase properties or purchase a new home. However, you should not wait too long, because as the country slowly begins to recover from a recession, real estate prices begin to rise.
Recessions Force People to Sell Homes at a Loss
For those who could not keep their homes during the most recent recession and found that the only way they could survive was to sell their homes, investors in real estate and property were able to buy many properties below fair market value. That means that sellers were forced to take a loss on the previously assessed value on their properties in an attempt to liquidate assets and get out from underneath the financial chokehold of the recession. It was, definitively, a buyer's market, and many people who had waited out the worst of the recession to buy a house were able to buy the properties they really wanted because of the significant drop in property prices.
Round Two of a Real Estate Fallout
Since many people found that they still could not keep their homes even after they modified their mortgages under HAMP, President Obama created HAMP II. HAMP II allows people who have already gone through the original HAMP process to refinance and restructure their mortgages a second time, extending the length of time they have to recover financially and keep their homes. While most of these people should be able to keep their homes for many more years, there will still be another round of home foreclosures in the next couple of years when a small percentage of HAMP II homeowners are unable to keep up with their mortgages. Then there will be more houses for sale at a good price. Click here to learn more about homes for sale in your area.