Author: Troy Foote Added: August 25, 2008
Copyright (c) 2008 Troy Foote The economic condition around the country is very grim indeed. Not only is the real estate market taking a tumble but also it looks as if a recession is just around the corner. With the dollar weakening many wonder if relief is in sight. However, it is not all bad news. There is one thing that just may rally the housing market, foreign investors. Homeowners are finding it very difficult to sell their homes. Unlike a few short years ago homes would not be on the market for maybe a month or two before offers started pouring in. But now potential homebuyers either cannot afford the prices or they simply cannot qualify for a new mortgage. So what choice do they have but to rent until the market stabilizes. With the shortage of buyers within the country, sellers are discovering new buyers from abroad. Experts speculate that investment from Europeans is likely to increase in the coming months. Many speculate that foreign investors have recognized the value in buying homes in the U.S. Prices have declined, making them far more attractive. In fact, in some cases, foreign buyers could be poised to replace the niche that first-time homebuyers held before they were squeezed out of the market as a result of the recent real estate crash. This could bold well for homeowners who need to sell quickly, either to upgrade to a larger home or get out of the homes they can no longer afford. Brokers have reported an increase in the number of international buyers interested in purchasing US real estate grow as much as five times over the previous years. So why is it cheaper for a foreign investor to buy homes in the US than it is for an American buyer? The Euro. A foreign buyer who invests in a home today would need far less money in terms of euros to make a substantial down payment on a home as a result of the weakening dollar. In fact, foreign buyers today could make what is essentially a $50,000 down payment for little more than 34,000 euros today. A year ago that same buyer would have needed nearly 38,000 euros in order to offer the same amount for a down payment The exchange rate has definitely provided support for increased spending power in many locations. In certain areas, like New York and Chicago, the demand has definitely increased. In some cases, the demand has grown so much that it is actually outpacing supply. California and Florida are also proving to be popular with foreign buyers and investors. The latter two markets, which have been among the hardest hit, are embracing the relief with open arms. Florida, in particular, is still struggling with the crash of the condo market. Many properties are now being marketed specifically toward foreign buyers. High-end luxury homes that have languished on the market for months are among some of the first to be targeted for interested foreign buyers. The Internet has proven to be a successful marketing tool in the past and today agents and sellers have discovered it is often the easiest way to reach foreign buyers. Compared to other advertising mediums it is often far less expensive and allows them to reach a broader audience. When marketing properties toward foreign buyers, this can be particularly important. Foreign buyers may not be the full salvation that real estate agents and homeowners need to completely recover from the housing bust; however, they are certainly providing a bit of welcome relief in many beleaguered markets.
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