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Should you buy a home during a recession?

Timing is everything when it comes to the real estate market. Recessions are an inevitable part of the market cycle, and they usually result in lower house prices.

Therefore, it may be tempting to buy Merced County real estate during this time. But, is it wise to buy a home during a recession? Here’s everything you need to know to make an informed decision.

Assess your finances

A recession not only dampens house prices, it also results in widespread unemployment, high interest rates, and little consumer confidence. Therefore, it is vital to know if you can actually afford not just the purchase price but also the hidden costs that come with a home purchase – down payment, closing costs, mortgage payments, and so on.

Which begs the question: can you hold on to your job during a recession enough to make your mortgage payments?

Don’t rush into buying; assess the risks and benefits objectively.

Learn to spot a good buying opportunity

If your employment is stable and you have the savings for a deposit, then there are a variety of benefits toward buying in a recession. It is important to understand that some sellers will price their homes based on the previous market value, which means that not every home will be a good value investment.

However, there will be many buying opportunities available – especially from sellers who need a fast sale. Look out for homes that have been on the market for a while since sellers may be willing to accept a lower offer. Other costs may also be negotiated due to the position of the seller.

Don’t buy a house just because it’s cheap

Even if a home is priced lower than the market value; this does not automatically make it a good investment. Always consider other factors such as the neighborhood, potential repairs, and so on.

Homes may also need a significant investment to get them up to scratch, which means that not every cheap home is worth going for. Be astute in your approach and pick out a home that matches your criteria. A recession shouldn’t compel you to take shortcuts when it comes to vetting homes.

Consult before buying foreclosed property

In a recession, there will be many foreclosures and short sales because homeowners can no longer afford their mortgages. As with all properties, it is vital to do your research. Consult with a professional real estate agent who can help you make the best decision.

Homes for sale in Merced, CA

A recession can provide unique buying opportunities for those that are well-prepared. If you’re looking to purchase your dream home for the right price, then it is essential to rely on a top Realtor in Merced, CA. They can help you navigate all types of markets to ensure that you get the best value for your investment.

At Soldavi Realty, our team works with you on a personal level to get to know your specific requirements. You can depend on us for professional service and our outstanding knowledge of the local real estate market in California’s Central Valley. Call 209.383.3000 today!

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