As we hear the media speak about the growing foreclosures and falling prices, we might be led to think that real estate investing is a risky proposition! In fact the opposite is true! As prices ‘correct’ to more realistic values and mortgage rates remain at historic lows, the longterm potential of real estate appreciation becomes more sustainable. One cannot expect the enormous rates of appreciation of a few years ago to continue without these corrections. There are many bargains around us now, and many sellers are all too anxious to negotiate! Also, the recent fallout of the subprime lending market was a ‘correction’ of another sort. The lax lending guidelines for credit-challenged people in the middle of the real estate appreciation frenzy and froth resulted in lenders tightening their guidelines, and resulting in more common sense lending. It is true that some people may not be able to purchase homes right now because of credit issues, but with credit counseling and financial education and a little time, they will! The subprime correction has really not affected people with good credit and financial stability, and by tightening guidelines for lending less people will be likely to go through foreclosure. These corrections are healthy for the market and the industry.
