When you think of a recession or the economy not doing as well as it usually does, the idea of buying any piece of real estate, let alone a luxury home might initially be the furthest thought from your mind. But if you have more than enough money to get through the recession and you were thinking about buying a luxury home in the near future, this could actually be the optimal time to move forward with your plan. Here's why you should not hesitate to look into the luxury housing market during a recession.
Interest Rates Might Be Lower
We can't guarantee that this will always be the case. But in general, one of the ways that the U.S. government tries to boost the economy and get spirits up again during a recession is to drop interest rates. This might not be great for your savings account, but it is absolutely ideal if you are looking to take out a new loan on a luxury home. Borrow money while interest rates are lowered and you could save yourself thousands of dollars in the years to come on your luxury home mortgage.
Listings Might Start Lower
Luxury home sellers prefer a robust market with lots of competition amongst buyers. But they also know that a recession or economic downturn is a time demand is likely to be far lower for their homes. In order to make their houses more appealing, many sellers may be willing to start at a lower listing price to attract attention. You may also be able to get the price down further at the negotiating table. If the seller hasn't had a ton of interest in recent weeks, they might jump at the chance to finally sell once someone expresses interest.
Get Extras Tossed In
Luxury homes are often filled with numerous valuables like paintings and other decor, and some homes may also have high-end appliances or yard equipment. If your area is going through an economic downturn, this may allow you to really play hardball at the negotiating table. We already discussed how the listing price could be lowered, but you may also be able to get more "extras" tossed in with the house, like getting to keep some of the current decor or equipment.
An economic downturn might not seem like the time to take out a mortgage, but if you are financially well off, this could actually be the perfect time to contact a real estate agent about local luxury homes.