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The decision to make an investment in houses in the current credit crunch is a difficult one. Much of the infomercials being given out is misleading – intentionally.The real question is when to invest in property.

The simple fact is that house valuations have not reached bottom yet and a decision needs to be made as to whether an investment in properties is for a easy profit by flipping the houses, or as a long-term investment that will provide a return over time. In many parts of the world, values are more appealing for the buyer interested in long-term income, but not so much for the investor wishing to make a quick capital gain, especially in the short term.

There is no doubt that house valuations still have a way to alter , and the direction is down wards. There may be a few places, especially in the US, where prices have reached their lowest point, but these will tend to be in markets where there is a huge amount of inventory of distressed homes.suach as Nevada with huge inventory of REO properties.

Getting the timing correct is all important when making an investment in properties because there are some markets that may never recover, and some markets that have already begun recovery. There are substantial differences between the most boom-fueled markets and those that saw slower, more sustainable growth during the credit boom. Those most likely to recover first are the ones that were least affected by the boom. Those most likely to recover last will be the ones where artificial inflation created massive increases in homes prices over the last twenty years or so.

A great amount of effort is being put into re-inflating the housing bubble by the governments. Some of them are even in danger of going bust by doing so, but are desperate enough to try even if they do end up going broke. The UK government for example has printed several hundred billion in new money in an effort to prevent a market correction.

Rising numbers of REO properties are still dragging down the market in the USA, and the governmental intervention has done little to stop the flow of property into the banks. There are massive quantities of bank owned properties in the system that has not yet been placed on the market. This approach of allowing the banks to hold so much property back from the market place must surely backfire, and there must come a time when this stock is released.

Where this will end is anybody’s guess, but currently, investing in real estate is a risk, which requires careful consideration before doing so. There is substantial money to be made if the correct market is chosen, and due diligence done before investing. At the other end of the problem are those wishing to sell income properties in an extremely down market. The value of such properties is difficult to assess with the present low sales volumes, and any median price figures need to be examined closely to determine the level of sales before making a decision.

At the other end of the problem are those wishing to raise financing in an extremely down market. The banks are just not lending and arranging investment property loans is extremely difficult without a strong track record. The value of such properties is difficult to assess with the present low sales volumes, and any median price figures need to be examined closely to determine the level of sales volumes before making a decision.