Pros and Cons of Buying a House During a Recession - Should I Buy Now or Wait

To buy in a recession or not to buy in a recession. That is the question, and that is literally what everyone's gonna be asking themselves over the next six to 12 months. Let's discuss.

Hi, welcome back to another Coffee with Coleman. We'd love to discuss Washington DC business, real estate, all that. My name is John Coleman. I'm a real estate agent here in Washington, DC with the Jason Martin Group Favor. If this is helpful, if you like learning about recessions in DC and all that stuff, then go ahead and hit the like button, cuz it lets me know you're there.

And if you wanna say up to date on all this stuff. Click subscribe cuz it'll alert you when I release new stuff. That might be cool for you too. Buying in a recession, there's gonna be pros and there's gonna be cons. My goal is not to tell you whether it's right or wrong, but I wanna tell you the pros and cons that you need to be thinking about whether it's right for you.

And so here's what I'm thinking about as we're going through the process and what I'm discussing with purchasers and sellers today. Let's start with the pros number. Interest rates are typically lower during a recession, and we've been dealing with some HA interest rates recently, and according to bank rate.com, mortgage rates are at an all time low, typically during a recession, making it the ideal time to buy a house.

Now, are we gonna go all time low compared to where we were earlier? No. Are we gonna be lower than what we dealt with at the end of 2022? It seems like it. As the Great Warren Buffet once said, interest rates, that's the key. That's the game changer. The second pro is there's less competition from other buyers with the economy.

In a downturn, some of the people are hesitant to buy a house, so there are maybe less bidding wars to deal with than maybe we've seen in the past. According to mpa mag.com, this means buyers can take their. Define the perfect home and may not have to rest in a decision when they felt like they needed to previously.

Number three is you might have a better chance of negotiation on price. If the seller is motivated to move the property during recession, they may be more willing to accept a lower offer. According to Forbes during recession, a lot of sellers are willing to part ways with their property at a lower. And they also might be willing to negotiate a little bit more and let you have more contingencies to protect yourself.

The fourth pro is sometimes there's some government incentives to buy homes during recession. For example, some countries offer tax breaks or financial assistance to encourage people to buy homes as reported by money.com. Now, a lot of that does take a little bit of time to come down the. But it's opportunities to keep your eyes open for, and we're already starting to see different mortgage programs and different things that are becoming available that are gonna be beneficial for purchasers looking to get into this market.

So make sure you're staying up to date with your lenders about what's happening in the world today. Onto the con. Let's talk about the cons. So the first con is the housing market can be unpredictable. During recession, according to bank rate.com, the housing market is often affected by the overall economy, and can it be difficult to predict how it's going to behave during a recession?

So a little bit more wild factor out there. Number two is it might be harder in getting approved for mortgage according to the mortgage association's during a recession lending institu. May be more cautious about approving mortgages that may, and they may require like a higher down payment, a better credit score, or it might just cost you more money.

I've seen situations where the funding fee just cost more because there's a higher risk to them in their past net. Along number three is, You have a harder time selling your home if you need to move. So according to Forbes during a recession, the number of buyers in a market may decrease making it harder to actually sell your property.

So if you need to sell your property to buy a new property, that first part might be a little harder than it's been in the past. So if you have questions about how to do that at scale, I do have a video that's dedicated to buying and selling at the same time, and it has the pros and cons of what to be thinking about there.

Recommend checking that out. So the fourth is you may experience some financial stress. According to money.com during a recession, jobs start to get lost. Salaries can come down a little bit, and if you just exerted yourself and stretched your budget to get into a new place, and you get something like that happens in your life, that adds some additional stresses that you need to be thinking about.

So people that are a little bit less risk or more risk adverse, they would be more willing to just sit back and wait for things to ease up as opposed to going during the uncertain. All right, so there you have it, folks. Those are some of the pros and cons of buying a house during recession. As always, do your own research and consult with a financial advisor before making any bigs decision.

And each market varies. So here in DC will be different than Boise, ido, it will be different than San Francisco. It's gonna be different than even Baltimore, which is just up to the road. So it's things that you need to consider about and talk with various professionals to get the best information for your specific.

And remember whether it's a recession or a boom, the most important thing is that you're happy and comfortable in your new home, and that is something that we would love to help you with. So if you have any questions, go ahead and put 'em in the comments below. If you enjoyed this content, I recommend liking and subscribing.

It lets me know that you enjoyed it and it lets you know when I release all the cool things that might be helpful for you as you're going through this stuff. So thanks again for stopping by another coffee with Coleman Peace.