U.S. Foreclosures Up 18% Over Last Year

According to a June 11th Associated Press release, U.S. foreclosures increased 18% over this time one year ago, and the crisis is now spreading to prime mortgages due to high unemployment.

In a bit of slightly better news, lay-offs seem to be easing in the U.S. What that means is that unemployment is rising more slowly that it was a few months ago. It’s still rising, but at a less alarming rate.

Depending on which paper you read, retail sales are either improving, or they’re pretty dismal.

The Fed says the recession seems to be over, but now mortgage interest rates and gasoline prices are on the rise.

Foreign investors can be forgiven for wondering what is actually happening in the U.S. Americans are wondering the same thing. The news reports both horrendous statistics and cheery predictions from government officials. It’s a schizophrenic mix of optimism (to encourage confidence and spending) and pessimism (because let’s be honest: things look grim).

If you’re thinking of investing in American real estate, your best bet by most accounts is the west coast (California, Arizona, New Mexico, Oregon, Washington), or the luxury market in the north east (New York City, the Hamptons). Both of those housing markets seem to be improving and are now seeing sales pick up and even a few bidding wars, even though the bulk of real estate selling is still made up of mostly distressed or foreclosed property.

To get the best deal, it helps to have your own money (mortgages are hard to get and the interest rates on conventional mortgages are on the rise). In some areas, short sales are even starting to go through, which wasn’t at all true six months ago. Some banks and mortgage companies, faced with a glut of foreclosed homes in line to go to auction, are starting to take short sale offers seriously now. You still need to work with a realtor who has successfully negotiated a short sale, not just one who uses the word in ‘dog’ listings, but if you can find such a person, a short sale is a possibility now.

Real estate in the U.S. continues to be very neighborhood-specific, and there’s just no way to understand if you are looking in a good neighborhood (good as in ‘will retain value’) without an experienced local realtor on your side.

If you move carefully, and get good advice, some parts of the U.S. do seem to be a good deal now.

Just be very careful, and don’t overpay.