With home sales in the United States at a 50 year low, USA Today has reported that existing home sales fell by nearly 10 per cent in February 2011 to their lowest level in nine years. The newspaper says that ‘new-home sales are on track to come in at just 250,000 this year, the fewest since the Kennedy administration, when there were 120 million fewer people in the United States.’
Low prices and attractive mortgage rates are being counterbalanced by high unemployment and strict lending criteria, meaning many people prefer to rent. This is helping drive rental prices which are, in turn, attracting investors and overseas buyers to the country.
These factors are highlighted by a recent study by Capital Economics that found that 60 per cent of property sales are to foreigners and investors, most of them paying cash. In fact, Thomas Shapiro, president of global real estate investment firm GTIS Partners, says that in international real estate circles, the US is viewed as the ‘new emerging market’.
Foreigners are attracted to American Property because their local currencies are much stronger than the dollar, whilst investors like the rising rental income. Paul Ashworth, managing partner at Capital Economics, says: “There is a search for yield that is making residential property look more attractive.”