Is it a Good Time to Invest in Real Estate?

As we watch the U.S. economy head for its deepest and longest recession since World War II, we ask ourselves if this is a good time to invest in real estate? Especially now as mounting job losses take their toll on consumer confidence and spending.

Last month, U.S. employers cut payrolls at the fastest pace in 34 years as the unemployment rate rose to 6.7%, the highest level since 1993. The 533,000 drop brought cumulative job losses to 1.91 million this year according to the Labor Department in Washington.

Keep in mind that the actual U.S. unemployment rate may be as high as 11% to 13% since the rate published by the Labor Department excludes people who have been unemployed longer than 12 consecutive months.

Additionally, U.S. stocks fell for the fourth time in five weeks as the worsening job market added to concern the recession is deepening.

John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, said the jobs report suggests that the economy shrank at annual rate of 5 percent in the final three months of the year. That would be the biggest contraction since the first quarter of 1982.

So, with all the negative news about our economy is this a good time to invest in real estate?

The short answer is an absolute YES!  Why?

The answer was clearly stated by Sir John Templeton, the legendary investor and mutual fund pioneer.  He said, “The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.”

There is an abundance of good real estate deals all over the country today. With real estate values and mortgage rates at historic lows, finding property with neutral or positive cash flow is not difficult to do.

Be sure to do your research and buy in markets with the strongest economic fundamentals, then hold for the long term in order to gain maximum returns.

Remember that people will always need a place to live!