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5 Secrets for Surviving a Real Estate Market Downturn
History repeatedly serves to show us that the real estate market is cyclical. It has boom times and stagnant times, occasionally it suffers a crash but real estate never becomes worthless, therefore if the experts are right and we're about to suffer a slow to stagnant period in the real estate market, all is not lost! There are 5 fundamental secrets that real estate investors like to keep close to their chest and they are the secrets that enable them to survive and even profit during a bear market. This article blows the lid off the secret world of the professional real estate investor! 1) Aligning For Profit in a Bear Market When professional property investors believe the market is entering a downward phase i.e., changing from Bull to Bear - they will change their investment strategies accordingly. One method that tough investors apply is to buy up property in the best areas that they can afford once a market is slumping already. Professional real estate investors know that the best areas for property always boom again very early on in the next property cycle. By working in this way they can then leverage their investment by selling their property early on in the boom cycle and buying elsewhere and always remaining one step ahead of less professional investors or average home owners. Up and coming areas will eventually peak as well of course as they are swept along on the tide of the boom, but they will not peak first and investors in these areas will have to wait longer to see their profits. Professional investors will likely enter these areas just before they peak and sell up just before the heat goes out of the market enabling them to again buy up what they can afford in the best areas thus positioning themselves ready for the next upward trend. And so it continues! 2) Slow Down Your Speculating You may already have decided that the time is no longer right to be over extending yourself and you may have cut back on your property purchases, but remember that making any home improvement or taking on any renovation projects during a downward period of the property market is also considered to be speculating. Don't just assume that capital appreciation from your property will justify home related expenditure right now?in a bear market it won't. 3) Never Forget The Supply and Demand Theory Property prices don't go up infinitely, if you examine the ebb and flow of the market in the US over the past decades for example, you will see that stand alone investment in real estate would've returned you gains of just over 1 percentage point above inflation! There comes a point in every market cycle when the market runs out of investors willing to buy up at the top prices and there comes a point when first time buyers are frozen out of the market. As demand dries up, over supply brings down prices and this stops the entire market in its tracks. If you remember this fundamental fact and examine the movement of the market closely and carefully you will be able to see when supply is about to outstrip demand, you will be able to watch first time buyers reigniting the market, you will understand when the time is right to sell and when the time is right to buy. 4) Balance Real Estate Exposure You may assume that your only exposure to the property market is what you physically hold in the way of real estate assets - but don't forget all your paper investments as well. Do you have money invested in REITs, do you have funds that invest in commercial property as part of the underlying portfolio, what about your retirement fund, which market sectors are the find managers investing in on your behalf right now? Don't assume that fund managers will make the right decisions at the right time on your behalf, you might be able to see the heat going out of the market quicker than they can react. If this happens you have to be prepared to rebalance your entire portfolio and move your exposure away from real estate if you believe the market is about to dip. 5) Protect Your Equity There is nothing more valuable than the equity you own in your own home. Do not put that at risk. It is very tempting in a boom market to re-mortgage yourself back up to the new greater value of your home, but in so doing you expose yourself, your family, your home and your future to unnecessary levels of risk. Secure the roof over your own head first and foremost, and only then proceed into the greater real estate market with care! Do not be tempted to secure any extra loans or mortgages on your family home. Professional and wise real estate investors worth their salt will always secure their own position first and foremost. Rhiannon Williamson writes for real estate investors, international investors and expatriates via her site http://www.shelteroffshore.com/ If you want to discover the latest investment property hotspots, learn about investing offshore or become an expatriate and living and working abroad, visit Shelter Offshore for the latest articles, guides and resources.
MORE RESOURCES: A Potential Mamdani Mayorship Strikes Fear in the Real Estate Industry The New York Times There’s one elite group propping up the Manhattan real estate market right now — everyone else is sitting on their hands New York Post Triangle homes sitting on the market longer, why a real estate agent says it’s about perspective WRAL.com Wellness Real Estate Set to Top $1 Trillion | Florida Realtors 4 real estate investors shared with us an overlooked advantage to buying property - Business Insider Detroit sues blockchain real estate firm that owns rentals with hundreds of violations Detroit Free Press Detroit sues cryptocurrency-based real estate firm to correct hundreds of property violations The Detroit News Senate Passes Tax Bill With Major Wins for Real Estate National Association of REALTORS® Meet HBJ’s 2025 real estate power players Hartford Business Journal Shlichus Isn’t Real Estate Anash.org Detroit Evening Report: Detroit suing blockchain-based real estate firm for neglecting hundreds of properties WDET 101.9 FM Inked: Long Island commercial real estate deals roundup Long Island Business News Opinion: Anticipated tax changes impacting real estate industry Springfield Business Journal LOCAL REAL ESTATE TODAY 7.3.25 KQEN News Radio George Pierson, Realtor, Home 1st Real Estate JTV Jackson Real estate market still good for sellers Addison Independent CEO Roundtable: Residential Real Estate Springfield Business Journal Would lower interest rates help NH’s real estate market? NH Business Review ‘Unfiltered’: Social media that pays — and the channels to skip Real Estate News by RealEstateNews.com Real estate secondaries has plenty of room to grow, but pricing can be a challenge Secondaries Investor 'Keep it moving': HGTV cancels TV show hosted by Georgia couple after 4 seasons Savannah Morning News Real estate firm acquires Cecil residential properties for $14.6M Maryland Daily Record Dawson County weekly real estate transactions, July 3 Central Nebraska Today Chicago Teachers seeking MWDBE private real estate managers Pensions & Investments REAL ESTATE | Harley-Davidson in West Bend, WI sold Washington County Insider Real Estate Transactions: July 4, 2025 Greenfield Recorder Three reasons why there’s value in owning real estate as part of your collision business Repairer Driven News 7 Morning Digest: Detroit sues crypto real estate company, community ice cream truck & more WXYZ Channel 7 News of public record: Muskingum County real estate transfers Zanesville Times Recorder Compass ‘has not and will not adhere’ to Clear Cooperation Real Estate News by RealEstateNews.com Real Estate Minute – 07-03-2025 Texomashomepage.com Texas Senate Bill 17 Restricts Foreign Ownership of Real Property in the State The National Law Review Texas Teachers assigns $950 million to real estate, private equity Pensions & Investments Real Estate Transfers: July 3, 2025 The Suffolk Times GPIF is shifting from the predictable to the tactical in real estate Private Equity Real Estate | PERE It turns out some real estate people like Zohran Mamdani The Real Deal Is Your Money Safe in the Bank in 2025? Norada Real Estate Investments Homes for Sale in New York and Connecticut The New York Times Hyatt Announces Agreement to Sell Playa’s Owned Real Estate Portfolio to Tortuga for $2.0 Billion Hyatt Newsroom The dreaded Zillow ban is finally here. Here's what you can do Business Insider Was operator of San Antonio apartment complexes running a Ponzi scheme? San Antonio Express-News Top residential real estate sales for June 16-20 in Sarasota, Siesta Key, Palmer Ranch, Osprey, Nokomis Your Observer Egypt Sherrod Shares Heartbreaking News About HGTV's 'Married to Real Estate' Country Living Magazine Homes for Sale in Manhattan and the Bronx The New York Times Zillow ban lawsuit shakes real estate: What sellers need to know Fingerlakes1.com More than 350 Quintana Roo real estate agents certified to provide buyers with verified ownership in real time Riviera Maya News Where Does Bruno Mars Live? Examining the Singer’s Real Estate Portfolio Architectural Digest ARTIS REAL ESTATE INVESTMENT TRUST ANNOUNCES TIMING OF RELEASE OF Q2-25 RESULTS AND CONFERENCE CALL Yahoo ALTA Applauds Congress for Passing Tax Package Preserving Key Real Estate and Housing Provisions StreetInsider Zohran Mamdani’s Ideas on Commercial Real Estate Come Into Focus Commercial Observer Long-closed Orchard Supply site in San Jose is bought in hopeful sign for property SiliconValley.com |
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