What happens to real estate during a recession
On Monday, the stock market had its worst decline since 1987 and entered bear market territory - a 20%+ decline from a recent market peak. With uncertainty leading to market volatility, we’ve increasingly been asked how real estate is holding up and if now is a good time to invest.
At Doorvest, we're believers in the many advantages of owning single family rentals but also believe real estate investing is a long-game. Investors should be prepared to hold onto homes for upwards of 5 years while ignoring short-term blips. That said, the exciting news about real estate investing during a downturn is:
- With the exception of the 2008 housing crisis, home values have historically been recession-proof.
- Even during the housing/mortgage driven recession of 2008, rental values remained stable or even increased as households sold off their homes and began renting. What this means is investors are able to continue to generate income while holding out for markets to increase again.
Lastly, mortgage rates are at historical lows which means investors are able to lock-in lower monthly expenses for their new investment homes.
We believe now could be a great time to purchase your first rental home or add to your existing portfolio.