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Economic news around the country has certainly appeared
to be dim in the last few months. As if the housing
crisis was not enough, now it appears that the country
is in the midst of a recession. The dollar has weakened
and many consumers find themselves wondering whether
relief is in sight. Quite surprisingly, these problems
may actually provide some encouragement for foreign
investors to rally the housing market.
One of the reasons that many homeowners are finding it
difficult to sell their homes is the fact that many
would-be buyers either cannot afford the prices or they
cannot qualify for mortgage loans. As a result, they
have found they have little choice but to continue to
rent and wait for the housing market to stabilize before
they venture into the home buying process. Some
homeowners are finding interested buyers in a surprising
source; however. Today, homeowners are just as likely to
discover buyers hailing from abroad as from next door.
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 home buyers held before they were squeezed
out of the market as a result of the recent real estate
crash.
If this trend continues, it could very well provide some
relief for homeowners who either need to upgrade to
larger homes or who need to get out of homes they can no
longer afford.
Brokers are reporting that inquiries from foreign
investors are definitely on the rise. Compared to the
number of inquiries that were received just a year ago,
many brokers are seeing an increase of as much as five
times the amount witnessed just a year ago.
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. Quite simply, foreign
buyers are able to buy homes in the U.S. for less of an
investment than American buyers.
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.
Sellers and agents have quickly latched onto the idea
that the place to look for interested buyers could very
well be overseas. As a result, many properties are now
being marketed specifically toward foreign buyers.
High-end luxury homes that have languished on the market
for months are 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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