COVID and Realestate investing

[Alex Chavez]

First time homebuyer : Should I wait 6 months to to see what the market will do (with this pandemic going on )to finally invest in real estate and purchase my first house . Or is this something I should get into sooner than later? Are we looking at a real estate crash again like 08 before this year ends ?

[Taylor L.]

Nobody really knows if an 08-style crash is coming. From an investor perspective, I think we're going to see at least some degree of correction in some markets. 

I know that even though the eviction ban has been lifted in some markets, judges are still largely not evicting tenants for non-payment in some areas (including Houston). If that continues and we do not see any kind of relief for property owners, there will be foreclosures. Real estate investors can't collectively carry the bag on the Covid Recession. 

Will it be as bad as 08? Maybe, maybe not. 08 was worse than a typical recession because the recession was specifically caused by the real estate debt market. The Fed has been kind enough to run the printers and prop up real estate debt (and other markets). However, oil prices are extremely low and that typically doesn't bode well for a lot of folks in Houston.

If I were a first time homebuyer right now I would absolutely be looking at property and making offers I could live with. Too many new real estate investors use fear of an impending recession to sit on the sidelines and not even look. Keep looking! You don't have to submit an all-cash $50k over asking offer on every property you look at. If you're renting, consider the sunk cost of rent compared to the progress you make on a mortgage. If you're going to live in the property for 10 years, are you buying in an area where you expect demand to continue to be high and prices to, in the long run, continue rising?

This, as with all other investment decisions, is your call.