Thursday, August 12, 2010
When the economy takes a turn for the worst, it’s not all bad news. In fact, those who have been smart with their savings and find themselves in a position for a home upgrade would be smart to take advantage of the market decline. The best way to do that is to invest in luxury homes. Why? Because luxury homes in a down economy can significantly jump from a seven figure price tag to a six figure price tag.
The best way to buy a luxury home for less is to check out the local markets after a crisis. Whenever there is an earthquake, hurricane or terrorist attack, the local real estate market of that area generally plummets. That’s the time to move in for the buy.
New Orleans real estate, for example, became much more affordable after hurricane Katrina. New York City’s luxury homes significantly dropped in price shortly after 9/11. These are examples of ways to purchase a luxury home for less after a natural disaster.
You don’t necessarily need a natural disaster in order to get a good deal on a luxury home, though. Short sales are another great way to get a good deal and there is usually an abundance of them in a poor economy. In a short sale, the lender is willing to agree to discount the balance of a loan when the borrower is no longer able to cover the mortgage payments on their own. Instead of losing the home to foreclosure, many homeowners will try a short sale first.
Of course, if a short sale doesn’t work out, there are always foreclosures. Foreclosures are when the lender has to take back possession of a house due to the borrower discontinuing their payments. Typically, the lenders do not want houses, they want cash. So they will sell these houses at discounted prices. Simply ask your real estate agent to help you find good deals through short sales and foreclosures and you’ll be surprised at the amount of choices available out there for great deals on luxury homes.