Big Bargains In A Bear Market

Big bargains in a bear market

Luxury Villa In the stock exchange they speak of ‘bullish’ and ‘bearish’ markets when referring to strong and weak showings respectively, and indeed, the stock markets are very much in a bearish state at the moment, with trading volumes much reduced.

The response to the bearish property market and accompanying drop in real estate prices has been altogether different, with up to 75% of those questioned in a recent American survey saying now is a good time to buy property, as compared with 39% willing to take their chances on the stock exchange.

A buyer’s market
Property fares so much better than shares because the lower prices are bringing value back into the market and creating bargains. However, at the heart of it is the public’s greater confidence in the mid to longer-term prospects of real estate. In their article ‘Ten things to buy before the economy improves’, Forbes say “At the top of the list: housing. This may be the best time in a generation to buy a home.”

“There are currently two kinds of people for whom the market is particularly interesting,” says José Ribes of Rimontgó. “Those with independent means or the ability to acquire a loan can snap up fantastic bargains in the current climate.” As Kiplinger’s Personal Finance advises: “It’s a good time to snag a bargain if you’re confident in your job prospects and you don’t plan to sell for at least five years.”

“The other kind of buyer to benefit at the moment is the person looking for a long term home,” says Ribes. “They can now afford properties they couldn’t dream of buying 3 years ago. In some cases prices are even at levels they were 5-10 years ago.” As a result, sales are already nudging up in many markets, with the UK posting the largest number of transactions in 18 months. While this increased activity will act to slow down price drops, the large quantities of unsold stock will hold off price rises for some time to come – ensuring this really is a buyer’s market.