Economics question

1. 52

   Kenaposted 13 years ago

   Economics question
   
   If you were to make a large purchase such as a house or a car, would you rather make this...purchase during a recession or during an economic strong time?

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2. 75

   pork22posted 13 years ago

   It depends. A house is usually a long term investment, purchase would be best when interest rates are low and house values are relatively low, and provided you can afford the purchase. Do you think there will be deflation? If so, financing is bad in a deflationary period. Investing during deflation would mean holding cash, long term treasury, bonds, etc. since assets lose value compared to the dollar. But if you think inflation is coming, then buy assets now that hold value (a house maybe, but not a new car) and finance them as much as possible.

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3. 59

   theindianbluesposted 13 years ago

   Normally everyone prefer to buy a property by looking after our financials. If you have enough capital then there is no side thoughts to buy it. Only one thing we should look for is the price tag, during the rescission we may get a cheaper price rather at a strong time. And in the other scenario, if you are a working person and would like to go for a housing/car loan, then better to look for the current economic condition because majority of banks will not agree to give the loan amount as you required even though your salary permits. Also you should look for any predictions on economic conditions of the coming period because you should have the capacity to repay the loan. Just think about a bad condition and may loose your job etc., some  negative thinking, but still it is required.

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4. 60

   telltaleposted 13 years ago

   If your financial situation allows you to purchase a house in a recession, by all means go ahead to buy it, as it will probably increase its value in better and stronger economic times.  Buying a car makes no difference whether it is recession or strong economic time, as it is always a losing asset - of course you will lose more in a recession or you might not be able to sell it at all.

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5. 62

   Shahid Bukhariposted 13 years ago

   I am  not an Economist ... but its common sense, that I live a society, where most of us are subject to similar economic pressures.
    
   I mean, the buyer and seller are exposed to similar pressures ... so it makes little relative difference, whether, I make a major Investment, during a Recession or wait for the Good times ...

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6. 61

   LordUr-rosposted 12 years ago

   During a strong economy, because right now, I would want to enjoy the security/pleasures of the house. Even if it is just a investment, I am more into enjoying moments. If I have a lot of money and a great team, I probably would invest during a recession.

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