With all of the turmoil in our own real estate markets, we naturally feel that the rest of the world is as impaired as we are. But that is not the case, as this article in The Australian points out.
It could be that international buyers have been sitting on the sidelines waiting to pounce when the market shows a firm bottom.
The rate of forced sales suggests the answer is yes, although the strengthening US dollar and uncertain capital gains mean it’s not quite a foreign buyer’s bonanza.
Already, 2.2 per cent of all US homes are in the foreclosure process, according to foreclosures.com. The Wall Street Journal predicted this week that there could be 1 million foreclosed properties on the US market by the end of the year.
“So far this year, 748,381 homes — or 46 per cent of the foreclosures — have gone into the possession of the banks … because no bidders were interested in them at auction,” the Journal reported.
“With the banks’ inventory piling up as the properties fail to sell, the banks will likely have to discount their prices more in order to unload the homes, real estate experts predict. Such discounts could continue to drive the broader real estate market lower.” via The Australian
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There are clearly great real estate investment opportunities here in Miami Beach, Florida and the area. Properties can be purchased from lenders at steep discounts.
Let us not forget to give credit to the industry who single handedly initiated this global mess we are in today. The real-estate industry. If you were one of the home buyers in the past 8-9 years, you probably heard these words over and over again “buy now, buy now, buy now” “prices will go up, and up and up, buy now”. Here in California, they created bidding wars over houses. They had nothing to lose and everything to gain.
I bought my house in 2000, and then sold it because of a divorce in 2007 for more than double the price. My ex and I were flabbergasted that our house was being sold for that much! Why? Salaries didn’t double, cost of living didn’t go down, the economy is not in great shape. The average house hold income in southern California is still way below the mean home value!
The scariest thing is that they are doing it again. “Buy now” “prices won’t go down any more” “now that the government passed the bill, people will have a home-buying frenzy” “buy now”.
Thank God, the banks are not falling for it this time and repeating their mistakes.
So, I beg the real-estate industry. Please don’t put the world in a worse financial situation than it is in right now.
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