I’ve been on the sidelines trying to decide if now is a good time to enter this market. On one hand,the possible long recession we might face would create more need for affordable housing.there appears to be negatives also.
One might be that even with all the money the Gov. is pumping into the economy,things hardly look inflationary. Gold and all other commodities are plummeting. Look at oil…it has dropped almost 50% . This is not due to new discoveries but to a slowdown with less demand. The stock market has crashed and lending as frozen up. Home prices have also crashed and it’s hard to see the scenario that stops the slide in home equity. Savings are nill and everyone has tremendouys debt. This is not what inflation looks like. Where are you going to find "more money chasing fewer goods ? " This is pretty much the scenario that put Japan into a 10 year deflationary cycle. The only difference is that they had savings and we don’t.
So I guess I have a question as to what the next year or so will bring. I think it will be a deflationary period then followed by inflation as the economy recovers. If this is true,you certainly don’t want to buy real estate before a deflationary period.
One more factor bothers me a whole lot. It appears that we are going to have just a tremendous amount of jobs lost if this downturn is as serious as it looks. While we might have an easier time filling the parks, I think we could see a serious increase in tenants not being able to pay their rent. So I guess I would really stay away from tenant friendly states if this were the case. It would also make me want to get a bigger down payment on POMH’S . If you have quicker and more frequent defaults because of a horrfible economy,this would presnt a serious problem with the contracts we would be writting. Obviuosly,people don’t have the money for these big down payments.
Everything considered , I think maybe it’s wise to stay on the sidelines ? Could a few of you with more knowledge give me their opinion ?