Is Housing Recession Proof? 27

fiscal cliff and the housing marketThe government wants us to think that the only thing that won’t be affected by tumbling off the fiscal cliff is the housing market. It’s stable, it’s a safe investment, and whatever recession might come it won’t touch your real estate investment.

What do you think? Are you going to count on that?

The Federal Reserve is betting their money on the housing market, pumping $40 billion monthly into mortgage-backed securities. And foreclosures are down and prices have risen almost 11% since last year.

I think these gains are impressive and I like to see people committing to a good thing. But I’d still caution everyone to think ahead a little bit. Don’t assume that the recovery can’t be shaken. Don’t pretend that our government, employment, recession, and a million other things can’t drive prices back down.

But if you need something to believe in, then believe in this. You’ve seen the recovery get started, right? So if you see prices drop, that’s the time to pour serious money into the housing market. Buy the next time prices are low and you’ll be raking in serious returns before this time next year.

Don’t believe me? Then speak up.

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27 thoughts on “Is Housing Recession Proof?

  • ezra

    The Fed might be backing those securities just because it’s a nice way to attack the problem of the instability of mortgages, which wast a major catalyst of the depression or whatever you want to call it.
    also, i suppose the best way to get back to where we were was to go back there literally, by blowing the balloon back up maybe a tad.

    on the other hand, it sounds pretty safe based on these factors:

    1. primary home sales are not subjtect to capital gains.
    2. mortgage assistance is already a small part of the total mortgage market (which is why it is a myth that liberal programs started the depression by helping giving loans to poor people)
    3. anyone who wants to sell a house, and finds a buyer will do it, no matter if taxes are raised (in the case of houses owned by investors)

  • ezra

    addendum to reason 3:
    people who have the luxury of holding onto property due to tax rate changes, will not be selling soon anyway.