Where is the next hot foreclosure market to invest in?

Well, one thing 2009 bought is a potentially vast pool of foreclosure property to invest in. So - where is the best foreclosure market to invest in?

The United States? The amount of bank owned property sloshing around is quite stunning. Not including the ongoing devaluation in the commercial sector, the US banks now own an estimated 22 million foreclosures and are likely to add another 7 million to that over the next 2 years. No one really talks about this and industry insiders refer to it as "shadow inventory," because much of it is not actively for sale. Where do you think all that lovely federal reserve money went? What little that did not make it's way to a numbered bank account in the Cayman's went to prop up the banks deemed "too big to fail," and allow them to keep these TWENTY TWO MILLION residential properties off the market. Much of this "shadow inventory," is in Nevada, California, Florida and will not appeal to the overseas buyer unless it is within a few hours of an international airport - which much of it is not. The other question is - if it ever gets to the point where these properties are released onto the market - any one holding any stock is going to see that value plummet overnight. Caveat Emptor.

Spain? A similar story is unfolding in Spain, where the big banks are now that largest property owners in the country. This cost the European Central Bank €60 BILLION. I will say that again - SIXTY BILLION EUROS were dumped into the Spanish covered bond market to prevent the Spanish banks from collapsing - and they are dribbling these properties through to selected staff members at a discount, but that still leaves an unspecified (some are saying that even the banks do not know how many properties they are sat on) amount of repossessed property in Spain.

Dubai? Holy moley, the ongoing shenanigans and bullshit coming from that tiny Emirate should be enough to put any but the most hardened investor off for life. Still - if you happen to be an international bank, I have a feeling the amount of foreclosures in Dubai will start to rival Spain any time soon, and might be worth a punt. Values have fallen about 70% in the last 18 months and much of this stock was only part paid for off-plan.

Most of the people I know in the process of buying have simply walked away from their deposits. Some of which were substantial, but the word is there will be no recovery for years, despite the amazing quantity of government issue press releases to the contrary.

Happy New Year.