Is now the right time to invest in real estate?

The goal of investing is to seek out underestimated assets and acquire them for less than their intrinsic value. A market downturn presents a prime opportunity to do this. However, certain factors need to be considered before you go on a buying spree.
As a rule, home prices tend to fall during a recession. The 2008 recession saw property valuations crash, leaving 10.7 million homeowners in America with underwater mortgages which, in most cases, led to foreclosed homes and depressed home values.
The current COVID-19 pandemic has had an unprecedented impact on world economies, with major industries suffering losses as movement and productivity ground to a halt. Governments have clamored to launch bailout initiatives in a bid to stave off bankruptcies and bolster flagging industries. Wall Street has seen stocks plummet to record lows as worries over the coronavirus and its effect on the economy continue to plague the market.
Comparisons have been drawn between the current economic downturn and the 2008 recession. In terms of real estate, both instances have seen lenders tighten their criteria for home purchases and the likelihood of securing bank financing drop – this is especially true for individuals working in industries that are vulnerable to recessions.
One thing to remember, however, is that despite its current state, the nature of the real estate market is cyclical. During recessions, property valuations decline, developers cease building new houses in response to a dearth in demand, and properties tend to sit longer on the market, making sellers more w……