Thread: U.S Homes a Bargain for Foreigners

U.S Homes a Bargain for Foreigners

Thursday, Jan. 10, 2008 5:47 p.m. EST

By now, everyone is familiar with the bleak news about the U.S. housing market.
Yet the fate of housing in America could be even more depressing – if it wasn’t for the euro.

The euro’s strength has helped foreigners buy houses easily and at a steep discount, at least for them. As the dollar has fallen, down nearly 10% against the euro last year, housing can seem cheap for those abroad.

Investors buying homes with the euro are getting an automatic 30% discount, Craig Smith, chief executive of Swiss America, a Phoenix-based brokerage specializing in gold and precious metals, told Investor’s Business Daily.

So, a European can buy a $1 million house for just $700,000. A home listing for $250,000 can be bought for what feels to euro holders like $175,000.
Europeans are helping to prop up the housing market, which has faced a dismal outlook. Home sales have fallen by 20% and home values in large cities have dipped by 6.7% compared to last year.

The dollar continues to decline, too. It fallen against 14 of the 16 most actively traded currencies.

Foreign investors are now snatching up homes and, in effect, lending a helping hand to hold up the market. Luxury homes are now very affordable, something unthinkable 10 years ago.

Investors like sinking their money into real estate. In 2006, the Department of Commerce says that $44 billion of the $715 billion of foreign investment in the U.S. was spent purchasing real estate. The biggest fans of U.S. homes are people hailing from Canada, China, India, Mexico, and the UK. The median price of their homes is $299,500, and about half are used for vacations, according to a 2007 National Association of Realtors study.

Interest in purchasing homes in the U.S. is not waning. Germans are eager to purchase homes throughout the country. Engel & Volkers, the German real estate firm said it plans to open 300 residential sales offices in the U.S., in addition to its current offices in Florida, Connecticut and New York.

California, Florida and Texas are the most popular states so far. Florida is seeing a large number of investors purchasing condos or lofts near the universities where their children may study someday.

Florida generally has two kinds of purchasers, Jack McCabe, CEO of McCabe Research & Consulting in Florida, according to Investor’s Business Daily.

The first group includes the high net worth individuals, investment bank and hedge funds seeking the mammoth discount. The other group is made up of Canadians and Europeans who like the US because of the lower prices and the exchange rate.

"Everybody loves a sale,â€

For better or worse, our strict immigration policy will keep many of these from permanent residency, except for visa overstays.

It's not just homes, our companies sales to Europe are up. But I don't see it lasting if Muslims take over Europe.

Originally Posted by Captainron

For better or worse, our strict immigration policy will keep many of these from permanent residency, except for visa overstays.

They are probably being bought out by wealthy corporate investors who will rent them back to us at very high prices.

Another way to get property out of the hands of the middle class.