Investing in U.S. real estate has never been more complicated or more confusing.
Sales of existing homes in the U.S. unexpectedly rose 5.1% in February, but prices of existing homes fell another 15%. Most of the homes were sold to first time buyers, and nearly half of the properties sold (45%) were distressed in some way.
Thinking of investing in real estate in the U.S.? Mortgage rates have never been better!
But there’s a catch.
Getting a mortgage is still really, really tough. According to a recent Wall Street Journal blog, major lenders report that many potential buyers are having trouble raising the 3.5% downpayment that is required now to even start the lending process. Most mortgage lenders have tightened their standards, and Fannie Mae has also tightened standards for what kind of mortgages they are willing to buy and under what conditions they will buy them, making lenders even more skittish.
Worldwide, the internet is abuzz with talk of boom times for individuals investing in Detroit real estate. Foreign investors looking for good deals in U.S. real estate investment can be forgiven for catching Detroit “gold fever.”
More on Investing in Real Estate in Detroit: Is Detroit the New Wild West?
Deyaar developments in Dubai has admitted to a default rate of 60% on works-in-progress, and has agreed to reduce prices in an effort to bring defaults down to a manageable level. “Around 60 per cent of our customers came back to us saying they were unable to pay up on their property.” said Markus Giebel, CEO Deyaar.
More on Deyaar Development in Dubai Suffering 60 Percent Default Rate
Those of us who watch these things have noticed a disturbing trend over the last month or two – The national and international newspapers talking up the housing market quite aggressively. Much to the ire of their readers who are rightfully questioning the information being given. These are a few examples.
More on Property Investment Advice – Beware the Newspapers Talking up the Market
STOCKHOLM (Standard & Poor’s) March 17, 2009–Standard & Poor’s Ratings Services said today that it had lowered its long-term corporate credit rating on Dubai-based property developer Emaar Properties PJSC to ‘BBB+’ from ‘A-’. The outlook is negative.
Prices for investment properties in Bulgaria continue falling, with no end in sight at the moment. Particularly hard hit are the summer resorts of Sveti Vlas and Slunchev Briag (Sunny Beach), the largest summer resort on the Bulgarian Black Sea. In those luxury resorts, prices have fallen to such an extent that currently there are brand new three-bedroom “luxury” flats on offer for 70 000 euros. A similar fate has befallen the Alpine ski resort of Bansko, where new, completed modern apartments in ‘key locations’ are being offered for 70 000 euros.
Investing in U.S. real estate in this economy is not for the faint of heart. How can anyone second guess the current real estate market? Investors are as likely to lose big as they are to win, but one trend that looks like it just might catch on is cohousing.
More on Cohousing Investment Properties: The Next Boomer Wave?
One thing about the global downturn that could be considered positive is the amount of scams and cons coming to light, and the small property investor has certainly been prey to many. In a booming economy, many of these were written off and the injured parties pleas for assistance were ignored.
More on Property Investing News – Fighting Back Against the Scammers and Con Artists
It looks as though even the ruling family of Dubai is not immune to the stunning amount of lawsuits and court cases flying around the property investment world at the moment. An Iranian businessman is suing members of Dubai’s ruling family for close to two billion dollars over real estate investments, in a case which opened on Wednesday.
