In the UK (arguably the second hardest hit property market in the world), a recent survey has shown that many independent financial advisors would still back property as part of an overall investment portfolio. Even in the United States, the market hit hardest by property decline, there is room for optimism as many are seeing the opportunities in the current market.
Therefore, in the face of the continued mortgage crisis in the United States coupled with the global credit crunch, there are a significant number of analysts, advisors, and investors who believe that property is still a worthy investment vehicles. Obviously, property markets across the planet have slid in value and some have done so with significant and damaging results. However, for those investors and analysts who understand cyclical trends and other market occurrences, completely giving up on property would be a serious and costly mistake that is comparable to giving up on stocks during the early 1980's.
Although this is a point of view seemingly only held by optimists these days, analysts are looking for indications that this seeming free fall of the markets is bottoming out. Whether or not there is still room to 'fall', is arguable, but the fact is that real and significant turn around from an economic downturn occurs when demand slightly increases above supply, while new prices take into consideration inflation and the value of money. Of course, this is merely a simplified version of what property investors and analysts would examine to determine whether or not a recovery was on the horizon.
In following with the concept that like all politics, trends in propert are local, a nationwide or global recovery in both property and credit could take considerably longer. However, the individual markets will begin to rebound much sooner than the worldwide markets as a whole. For investors and firms who have considerable funds, it would be wise to focus on concepts such as the time, value of money and inflation.
When a 'bottom' to the market free fall is finally identified, obviously anyone in possession of considerable funds will be able to take advantage of the imminent market increase. Although it’s a tired word of advice, analysts and property investors would do well to have patience.
