There seem to be signs that the real estate housing market is beginning to recover, leading some to think that income property investment is still profitable. In the southern part of the United States, a 7.1% increase in home purchases occurred during the month of June. Several of the federal government’s 12 regions, including New York and San Francisco, have been showing signs of returning stability and even California and Florida, the States most devastated by the mortgage crisis, are starting to bottom out. However, not every region is experiencing the same growth.
In general, the western half of the United States has not seen the same recovery rate as the rest of the country, and in places like Minneapolis, the situation might actually be getting worse. Nevertheless, the rising rate of unemployment may be preventing many Americans from feeling the recovery. Overall, the economy grew towards the end of 2008. That gave many people hope for the future. However, unemployment has been growing even faster and may reach 11.2% by February of 2010. With numbers like that, many investors are beginning to wonder if an income property investment would be an acceptable way to augment their finances given the fact that income properties are becoming a catch 22 situation. Many investors don’t have enough money to buy investment property, and if they did, they probably wouldn’t need to buy them in the first place.
A catch 22 is a very grim assessment, but one that needs to be factored into any discussion about the income property investment or the market’s. The sad part about all of this is that no one seems willing to broach the topic of bailouts for the individual. In fact, Congress is steadily trying to cut down the length of time that people can file for unemployment benefits. It would be much more reasonable to work on cutting down the unemployment rate. If that was reduced, then it’s reasonable to believe that people wouldn’t need to file for unemployment at all.
At this time, the real estate market is deceptive. Mortgage rates are very low, and it’s clearly a buyer’s market. However, buyers are losing jobs at an astounding rate, and that usually makes it difficult to own a home. The bright side to all of this is that, for the people who already own an income property investment, it is also a landlord’s market. Investors may be faring better than almost everyone else in the country right now.