OfflineThe situation in Europe has gotten significantly worse over the last few weeks. The problems in Greece has now infected Italy which is the world's 7th largest economy. (And by the way, Spain, Ireland and Portugal are right behind Italy in having serious problems.) There are a lot of major US banks that are involved with Italian debt and that could cause our banks to fall back into a loss position as soon as the end of November. If that happens, the housing depression will be extended another 3 years as the problems will run deeper than most people can fathom.
While these problems are macroeconomic issues, they will trickle down to us, so please be careful on your holding period. Of course, there is always a chance that bold action in Europe will stop this domino effect but if history is a guide, don't hold your breath.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
Judging by how many US stocks fell 8, 9, and 10% today, its hard to deny the effect this eurozone crisis is having on the US.
With that said, instability means opportunity for those that are educated and take action.
with normal instability I would agree that opportunity will be presented. However, I think the scale of problems that are about to begin mean that you should be careful about trying to catch a falling knife. This is not going to be a slow process, this is going to be a swift global kick in the a**.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
I do agree with you that RE investors should be extremely careful during this period of many unknowns. There will still be deals to be had, however like you said, extreme caution should be exercised, no doubt about it.
It still blows my mind how many stocks dropped 10% today. I've never seen anything like it.
My individual stocks went down again by more than 5%. Just going along for the ride. Thanks for the note on holding properties.
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in Spain, unemployment is at 20% right now...
in Ireland, homeowners got caught in the same predicament that the American homeowners are in now; most foreclosed properties have been completely stripped; families were forced to move back to their parents homes, filling up the garages with kitchen cabinets, bathtubs, etc. from the homes they once lived in....
and all this will continue trickling down our way...
Valerie
Valerie
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.... we all think prices are as low as they will go. It is impossible to pick a bottom, so we justify that the prices today can't go any lower. But in today's troubled economy, it is possible that Europe sneezes and we catch a cold. The banks crumble and the housing market goes another 20 - 30 % lower. So the answer is to be careful, be knowledgeable regarding the economy signs, be nimble with your holdings and be smart about your purchases.
I am aware of the problems but I have bought a few houses in October. It is because I have an exit plan. Do your due diligence on every home and don't be afraid to pass on a home that you are not comfortable with for any reason. Making money is the goal but preservation of capital is always the mantra of the investor. Check your risk/reward ratio and listen to it.
Always Looking to Acquire Houses | Always Looking to Amaze Investors