The ebb and flow of our nation’s economy may be tricky to understand at times. From one year to the next, there are periods of growth and economic expansion, followed by economic slowdown.
Many industries that contribute to the U.S. economy operate cyclically, and included among them is the real estate market. While many factors may contribute to an economic downturn, it’s important to remember the economy moves in cycles, and that this is a part of the way a healthy economic system works.
What Is a Recession?
A recession is a decline in economic activity for an extended period, lasting from several months to years. A recession results when the country’s economy begins experiencing negative gross domestic product (GDP), increased unemployment levels, decrease in retail sales, and varying degrees of income and manufacturing within an extended period of time.
A recession is an unavoidable part of the business cycle, and results from a consistent pattern of expansion and contraction within the economy. Several factors may contribute to a recession, including effects from uncontrolled inflation or an economic shock. Most recently, the latest recession has been attributed to the COVID-19 global pandemic.
Buying Land During a Recession and Its Advantages
While it’s nearly impossible to accurately predict how long a recession will last, and how soon it may be before the economy bounces back, there are still smart investments you can make as you wait for an upturn.
The advantages of buying land during a recession include lower prices and increased inventory. However, like any major investment, it’s important for you to assess how much property you can afford based on your income and how to take advantage of great deals before prices go up.
During a recession, it’s not uncommon for property prices to drop, making the land-buying process more appealing to prospective buyers. During a recession, you can expect to find purchase prices well below what they would be during a stable and healthy economy.
Another advantage of purchasing property during a recession includes lower interest rates and more attractive mortgage terms. Because the real estate industry plays such a critical role in the economy, the federal government lowers rates to help bolster property sales by offering cheaper interest rates on mortgages.
Owner-Financed Properties Are a Great Alternative During a Recession
As a prospective buyer, if you don’t qualify for a traditional mortgage as a result of federal guidelines stemming from the recession, owner-financed properties are a great alternative on the pathway toward land ownership.
Owner financing means a property is financed by the seller. As mortgage rates rise amid the recession, and with variable property rates occurring, owner-financing is a smart choice during these times.
When you purchase a seller-financed property, you’re offered more flexibility when it comes to a down payment. When working directly with a seller to finance land, a customer won’t be required to meet bank or government-required minimums.
When you decide to purchase under owner-financing terms, you will also benefit from a faster closing, which translates to less time having to wait to begin the process of setting down roots. The benefits of purchasing owner-financed land mean a less stressful financing experience than what you’d usually expect from having to deal with a bank or financial institution.
SRC Land Is a Trusted Partner During Challenging Times
SRC Land has offered buyers quality land opportunities for more than 20 years. Our team has helped land buyers navigate uncertainty because we make the land buying process simple and reasonable.
Our dedicated team of realty experts can share their collective years of experience and knowledge to help you map out a promising outlook that includes land ownership. Recognizing that taking the first step toward land investment may seem daunting, SRC Land is committed to helping you through each step of the buying process.
Harlingen and the communities we serve are resilient, and despite current challenges, we can work together to weather any storm. Let SRC Land help you realize your dream of buying land in Texas, and securing a brighter future for you and your family.