Many economists are predicting the recession could double dip and home values could drop an additional 20%. They believe the housing market won’t start turning around until the outset of 2012. If that happens, what is the best economic decision regarding real estate? Should you try and sell properties now, or hang on to real estate investments until the economy recovers?
Every situation is different, and there is no crystal ball that will accuratelly tell us what the future will hold. If you know you are going to keep your house or investment properties for a long time, then the decision to hold is obvious. While home values may be down for the next few years, in the long term they will go up. Perhaps you should ask, will this house be suitable for me and my family in five years? and what kind of payoff do you want from the real estate investment?
If you are happy with your current primary residence, then you need to look at your house as your shelter, not an investment. If it’s easy to meet your debt obligations, then wait until the real estate market turns around.
If you make monthly income from your investment real estate, then you already have a good long term investment. As you continue to pay down the mortgage the closer you will get to actually owning the property. There will always be demand for rentals because everyone needs shelter.
If you currently have negative cash flow, then you’ll probably be better off selling it now. List it now, but price it ahead of the competition so it sells before things get worse. Sell now and get out.. If we’re still two years out before home values start turning around, then it may be half a decade before homes are back to their current values.
Remember, real estate is regional and every market is different. Tremonton Utah Real Estate might see large declines while Redlands California Real Estate might actually increase in value. These predictions are just speculations, and nobody knows what will really happen to the future of the real estate market.
