Unless you've been purposely tuning yourself out from all the bad news with financial markets, odds you know it is now threatening the entire stock market and economy. There is a bailout plan on the table, which still doesn't have any guarantees as a "fix all".
So where do investors, not just real estate investors, but investors of all walks of life, go now? With the stock market teetering somewhere between a long term bear market and a meltdown, with inflation looming from the trillion or more bailout, where does all that big money go... you know, the trillions that make up the market cap of the stock market?
Gold? T-bills...? REAL ESTATE!
The first market to get clobbered from the bad practices of the financial markets was real estate. We all know how bubble happened, and it is now working it's way all the way back to the source.
We've seen the fallout from real estate, and some real estate markets are bouncing back nicely, while others are poised to do so shortly, and others are in a holding pattern. Recent builder numbers showed optimism for the first time in a while.
For investment minded people, here's the best part about real estate... it's a tangible investment. It's not something that vanishes when a company goes bust like stock shares. You're investment account vanish overnight. It's not something that can be easily manipulated like paper market commodities.
With the current uncertainties in other investments, and the known variables regarding the real estate market at this point, it is looking to be one of the safest types of investments around right now. With real estate, you know where you stand, and for many areas, we're standing near the bottom.
Also look out for more and more big time investment money is going to be moving in, as we talked about in a previous story about Sovereign Wealth Funds attempting to buy up houses.
Here's the caveats though:
1) Credit markets must not gridlock. It seems doubtful the government, with it's willingness to go as far as it has, is going to keep qualified borrowers from getting mortgages.
2) The overall impact on the economy, mainly employment, must not be highly affected.
Obviously, the above two issues could hinder buyers from stepping in at a pace that will finally shore up the real estate market (good if you're already in, not good if you are not), but the extremes presented by doom and gloomers don't seem as likely as a solid, healthy correction
As the old adage from ancient Rome goes - When there is blood on the streets, buy real estate.