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.