Is it time to buy US property?
It seems that the US house prices are at a fork juncture. Overall sales have dropped in July, after four months of increasing. The explanation expounded by the real estate “experts” is a combination of, too few houses available for sale on the market, and higher prices that have risen around 5% compared to last year. This has resulted in less choice for buyers and the absence of attractively cheap prices.
The Western US is the only region that saw sales increase and the average home price was at around US$ 350,000. The North East averaged around US$ 285,000, the Midwest around US$ 195,000 and the south East around US$ 215,000.
The debate is still raging among economic analysts on whether the US economy has recovered from the crash of 2008/9, or not yet. The Fed is still indecisively tiptoeing around the decision to raise interest rates or not, and when.
Pessimists are of the opinion that the US economy is a paper tiger and is nowhere near recovered. They see more doom, especially in view of the unstoppable growing budget deficits and the ensuing inflation of bubble of public debt. Others, more bullish, see things through rosy glasses, and assess macroeconomic parameters as improving.
There is a third view, and that pertains to foreigners considering investing in the US. They don’t necessarily restrict their decision on macroeconomic figures. For them, the primary objective is to diversify their holdings in a fairly stable and secure location. In that sense, the US remains an attractive destination with fairly wide options, both geographically as well budget-wise. As such, it is not very critical if prices rise or fall 5 – 10%. For them, the objective may be to catch the market before it rises too much. And even if it enters now into a lull phase or decreases, it may still meet the basic requirements of foreign buyers.
The property market has been inching its way upward for a number of years, and barring any major catastrophes, it would be expected to continue on that path. Nevertheless, watch the market to see which fork, prices will take in the short term.