International Real Estate Buyers Looking to the US market

International Real Estate Buyers looking to the U.S. market

Why are they looking and could this be the answer to our woes?

The real estate market in the U.S could be in for a rebound due to foreign buyers looking for investment properties and second homes in the U.S. The National Association of Realtors reported that overseas investors are interested in U.S. real estate bargains. In the past, the U.S. has not been top on the list of regions for UK and European buyers as they have selected regions such as Brazil, India, and Eastern Europe.

The National Association of Realtors reported in the “2007 NAR Profile of International Home Buying Activity” that during the past 12 months, one in three Realtors have worked with an international client or prospect and nearly one in five sold a home to a foreign buyer.

The sub prime market concerns and falling housing prices in the U.S. may make this a prime location for deals to be made. Consider the affect of the dollar versus the Euro and more home can be purchased for the same amount in Europe. This coupled with a decline in housing prices in many cities across the U.S., it is now prime for these foreign investors.

“About six years ago, when the euro was introduced, it started at something like 79 U.S. cents to the euro,” says Stefan Bolsen, head of Engel & Volkers Florida. With weaker performances from the U.S. dollar and the sluggard real estate market, it is like “buy(ing) in the U.S. at 2004 price levels. Considering the exchange rate, people from Europe (are) purchas(ing) at a 2002 price point. That is very, very attractive,” says Bolsen.

Additionally, the tightening credit market in the U.S. is unlikely to discourage these buyers as the NAR reports that foreign buyers are four times more likely to pay cash for their homes (28percent to 8 percent), and likely to spend more on average for the homes when they do purchase ($299,500 versus $221,900).

When asked, Steven W. Nelson, a Raleigh based Realtor feels that this will help the housing market to recover throughout the U.S., but will not be the only cause. “In fact, we are simply in a cycle which tends to run every 6-8 years and this too shall pass,” stated Steven. “Too many people are short-sighted and fail to look to historical reasoning for the markets. The financial markets and the real estate markets work in much the same way. You cannot continue unchecked with large appreciations without having a correction.”

Many pundits feel that the market will get worse before it gets better. However, it is expected to rebound to some extent by the Spring of 2008. “With this said, Raleigh is still the #1 sellers market in the U.S. and it will only get better,” stated Steven.

When asked if it is a good time to buy, Steven responded by saying “it is always a good time to buy. If you need to buy today then it is a good time to buy. The positives about buying now consist of the number of options on the market and that across the nation, it is a buyer’s market, so often you can buy more home than you could last year. If asked by a potential buyer, I would simply say that, it depends on them.”

For more information about this article, please contact Steven.

Real Estate Tip of the Week-Get the House Ready

A house that "sparkles" on the surface will sell faster than its shabby neighbor, even though both are structurally well-maintained.

From experience, REALTORS® also know that a "well-polished" house appeals to more buyers and will sell faster and for a higher price. Additionally, buyers feel more comfortable purchasing a well-cared for home because if what they can see is maintained, what they can't see has probably also been maintained. In readying your house for sale, consider:

• how much should you spend
• exterior and curb appeal
• preparing the interior

How much should you spend
In preparing your home for the market, spend as little money as possible. Buyers will be impressed by a brand new roof, but they aren't likely to give you enough extra money to pay for it. There is a big difference between making minor and inexpensive "polishes" and "touch-ups" to your house, such as putting new knobs on cabinets and a fresh coat of neutral paint in the living room, and doing extensive and costly renovations, like installing a new kitchen. Your REALTOR®, who is familiar with buyers' expectations in your neighborhood, can advise you specifically on what improvements need to be made. Don't hesitate to ask for advice.

For Your Home Our home improvement section features how-to tips and important information about repairing and remodeling your home.

Maximizing exterior and curb appeal
Before putting your house on the market, take as much time as necessary (and as little money as possible) to maximize its exterior and interior appeal. Tips to enhance your home’s exterior and curb appeal:

• Keep the lawn edged, cut and watered regularly.
• Trim hedges, weed lawns and flowerbeds, and prune trees regularly.
• Check the foundation, steps, walkways, walls and patios for cracks and crumbling.
• Inspect doors and windows for peeling paint.
• Clean and align gutters.
• Inspect and clean the chimney.
• Repair and replace loose or damaged roof shingles.
• Repair and repaint loose siding and caulking.
• In Northern winters, keep walks neatly cleared of snow and ice.
• During spring and summer months consider adding a few showy annuals, perhaps in pots, near your front entrance.
• Re-seal an asphalt driveway.
• Keep your garage door closed.
• Store RVs or old and beaten up cars elsewhere while the house is on the market.
• Apply a fresh coat of paint to the front door.

Maximizing interior appeal
Enhance your home’s interior by:

• Giving every room in the house a thorough cleaning, as well as removing all clutter. This alone will make your house appear bigger and brighter. Some homeowners with crowded rooms have actually rented storage garages and moved half their furniture out, creating a sleeker, more spacious look.
• Hiring a professional cleaning service, once every few weeks while the house is on the market. This may be a good investment for owners who are busy elsewhere.
• Removing the less frequently used, even daily used items from kitchen counters, closets, and attics, making these areas much more inviting. Since you're anticipating a move anyhow, holding a garage sale at this point is a great idea.
• If necessary, repainting dingy, soiled or strongly colored walls with a neutral shade of paint, such as off-white or beige. The same neutral scheme can be applied to carpets and linoleum.
• Checking for cracks, leaks and signs of dampness in the attic and basement.
• Repairing cracks, holes or damage to plaster, wallboard, wallpaper, paint, and tiles.
• Replacing broken or cracked windowpanes, moldings, and other woodwork. Inspecting and repairing the plumbing, heating , cooling, and alarm systems.
• Repairing dripping faucets and showerheads. Buying showy new towels for the bathroom, to be brought out only when prospective buyers are on the way.
• Sprucing up a kitchen in need of more major remodeling by investing in new cabinet knobs, new curtains, or a coat of neutral paint.

Moore letter demands explanation from Countrywide chairman

The Triangle Business Journal reports that State Treasurer - and gubernatorial candidate - Richard Moore has sent a letter to the chairman of mortgage lender Countrywide Financial, accusing the company of unethical and unsustainable business practices.

Specifically, Moore's letter says the California company wrote subprime mortgages for customers who it knew couldn't afford them and rewarded employees for having done so.

But when those mortgages started to go into default, Moore writes, the company's stock sank - hurting consumers as well as the value of the $11 million the state pension fund has sunk into shares of Countrywide (NYSE: CFC).

"As an owner of this company and a large institutional investor, I ask that you provide me with an explanation of why the company implemented and continued this business model in the face of mounting evidence that the product was unsustainable," Moore wrote.

Moore, who as state treasurer is the fiduciary of North Carolina's $75 billion pension fund, is locked in an already heated battle with Lt. Gov. Beverly Perdue to become the Democratic nominee for governor in 2008. Perdue hasn't formally declared her intent to run, but both candidates have raised more than $4 million, according to documents filed with the State Board of Elections.

Countrywide, the country's largest mortgage lender, has been battered by the downturn in the country's subprime market. Shares of the company were trading up 7 percent Thursday at $17.84 but are still down 58 percent this year.

When asked, Steven W. Nelson, a local Realtor for the Ida Terbet Team said, "The subprime mortgage market has been playing on the edge for some time and it was just a matter of time until it would blow up in their face." Steven went on to say that this is a simple adjustment period that we have seen the financial markets all the time with the latest being around 2000 when the dot.com businesses began to unfold and the suspect accounting of some major corporations began to unfold such as an Enron. It is unfortunate for those who have been caught in the subprime market, but "the bottom line is, these homeowners are the one's who signed their name. The number one rule in life is not to borrow more money than you can pay back."

He went on to say that it is a good thing that many of these mortages have failed since it eliminates a segment of the mortgage business that are truly "bottom feeders."

For a solid mortgage broker, Steven suggest that you contact him and he will arrange a meeting with one of his great lenders who are honest, above all else. If you find an honest mortgage lender, then you are on the right page.