February 15, 2008
US Foreclosure Market as a Property Investment
Having spent six weeks looking at foreclosures in the United States, I have decided to wait a while before investing heavily. This crisis has not yet run it’s course and I feel there are more casualties to come.
A recent report released by RealtyTrac, an American foreclosure company shows some horrifying statistics- 2.2 million foreclosure filings in 2007 – a 75 percent increase over 2006.
I did buy a couple of properties in Florida – but these were new builds offered by developers rather than foreclosed properties. This is a safe place to buy right now and even if prices fall another few percentage points, the likely increase in the value of the dollar (I am spending Euros) over the next six months will wipe that out.
As for repossessions, much of the property is in a poor state of repair, and the luxury of buying new is attractive. There will be more developers joining the ranks of those who have elected to cut their losses very shortly and this is where to find the best deals at the moment. But, you need to be there, on the ground unless you have a trustworthy representative to act on your behalf.
But for my money, right now – play a waiting game as far as repossessions go – a further price drop is likely over the next 3 – 4 months.
If you are looking for foreclosed property, Mark has written a good guide to where to find government owned foreclosures here.
This is RealtyTrac’s 2007 report.
And this video is a good representation of what’s going on down in Florida right now.
Filed under U.S.A by Ahmed
Comments on US Foreclosure Market as a Property Investment »
You are absolutely right in your assessment. Especially in South Florida where they have not even began to level off their excess inventory. I work for a Premier Auction Company that has seen a tremendous increase in developers seeking assistance in liquidating their holdings. I’ve also been working with a lot of bulk buyers coming from the north east as well as the west coast looking for deals (50-60 cents/dollar). I believe there are some great pre-construction deals out there. Especially if you’re buying with the euro or pound and can absorb the potential of a small decline.
Ahmed,
I am a builder and developer who presently owns two medium to high end vacation properties, one on Cape Cod MA and one on the east central coast of Florida seeking an investor to partner with to sustain the current properties which produce rental income. It is my expertise in negotiating with financial institutions and my knowledge of commercial and residential properties that I believe with an investment partner through acquisitions and development, we could increase growth and achieve financial rewards. For further information email ccdenterprises@hotmail.com
Ahmed,
My email address was wrong in my last post. It is cddenterprises@hotmail.com
US foreclosures are not yet ripe for the pickings. The best places to buy foreclosed property at the moment is Japan. For long term investors the USD could be stronger, though I see weakness in the next 6mths.
Andrew Sheldons last blog post..Can foreigners buy property in Japan?