5 Tips for Surviving a Housing Market Collapse
With average house prices in the United States continuing to plummet and no real end to the housing market downturn in sight, it is important that homeowners make the right decisions. The market will recover eventually, but until then, home owners should try to just survive. These are five tips for surviving this trying time in the real estate market.
Patience is a virtue in the real estate market, too. The value of your home might be dropping like a rock with the markets struggling the way they are, but it won’t always be that way. The recent drop in average home prices was the first such drop in recent real estate history. As the market stabilizes, home values will take a positive turn once again. Homeowners just need to be patient right now and hold onto their assets
Don’t be afraid to buy low
These plummeting prices can create tremendous value for potential homebuyers that have some guts. The real estate market is extremely resilient, so homebuyers must have faith that the numbers will rebound sooner rather than later. Still, it is understandable that many in the real estate industry are scared to buy right now. Their loss can be your gain. The sinking market offers some great deals on homes and land for those folks who have the money and confidence to jump into the market.
Protect your credit
Now more than perhaps ever before, it is important to have great credit. The current mishaps in the real estate market were caused by some suspect lending practices by mortgage providers. They were giving a home loan to pretty much anyone who walked in off of the stress. They have seen the error in their ways, though. You can bet that credit qualifications will be much more stringent in the future. Keep all of your accounts current and your payments on time. You will need excellent credit to secure a mortgage in the future.
Know your neighbors
It’s important to be aware of your surroundings in addition to your current situation. Each time a home is foreclosed in your area, the value of your home goes down by about 1%. Keep track of what is going on with those folks so you won’t be blindsided by changes in your home’s value. Realtytrak.com and Foreclosurenet.net are good resources that will allow you to get all of that information with the click of a mouse.
Hold off on unnecessary improvements
Now might not be the time to do those renovations or add on to your house. The market is likely to rebound sometime in the next few years, but there’s no sense pouring your hard earned dollars into a sinking ship. Save that money and spend wisely. There will be opportunities in the future for your home improvements to add substantial value to your home. Now is not that time, though. As a general rule, don’t spend more than 20% of your home’s value on improvements.