Condition of real estate in US

by

Arijit Roul

Policy induced market condition

The condition that real estate investing in US is today is largely due to the different policies which had been introduced in the economy and the real estate market specifically. The state had sanctioned a policy which inflated the real estate prices through the exorbitant mortgage rates. There were other policies which drove up the attractiveness of the real estate market such as tax credit for home renovation as well as grants for the first time buyers. There were also freebies included such as tax free benefits on capital gains which one obtained on a principal residence. Hence, the subprime crisis which hit the US economy was largely brought on due to policy induced consequences in the real estate market. Hence, many people now consider that real estate will only be having flat prices to offer for quite some time.

Strategies to adopt

There are some strategies which one can consider even if the real estate market in the US is sluggish. One strategy is that of selling one s house. This is the easiest strategy to consider. If one sells their house then the falling valuation of one s property will be suffered by some one else. However, such a sale should not be done unless one can research the specific locality and check out how affected one s area is with respect to falling real estate prices. Some cities are still maintaining their local real estate prices since the demand remains healthy in certain cities in the US. The fundamentals of the market should be seen carefully such as whether there are more buyers than sellers in the market. Then one can hope to get a good price for one s property and find people who are interested to invest in real estate.

Panic selling yes or no

There are some people who are panicking and are selling even if there are transaction costs involved as well as taxes and costs of rent. However, one does not need to panic that much. The neighboring countries like Canada also have overvalued estate prices and hence one should delay the act of selling or purchasing till the market stabilizes within and around the country. Those who do not want to get out of the housing market can choose to move into a smaller home and have fewer expenses to incur. Hence, even if the prices are flat and even dip down, it will provide one with options of investing in real estate which might not be totally at a loss. The experts in real estate are saying that investors are likely to not consider investing in property as a lucrative option. The experts feel that the housing market will comprise of purely home owners who will seek the most lucrative deal that they can find for staying in and not for investment purposes. There is of course another way of making profits out of a falling market like the real estate market at present. And that comprises of short selling stocks which are likely to get affected when the prices decline further.

Improvement of realty property as part of a real estate investment strategy is generally considered to be a sub-specialty of

real estate investing

called real estate development. There are some proven techniques and methods for

investing in real estate

that can make wealth for you.

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