In April 2012 the foreclosure filings in the U.S dropped to the lowest point in the past 5 years, down 15% from a year earlier and 5% from the previous month. The slowdown of foreclosures is the strongest sign of a recovering market that we have seen thus far…
What does this mean for investors looking to buy U.S Property?
The supply of US property has dropped sharply in many of the prime investment areas. In the past year property listings fell 22 percent from 2011. As the supply begins to shorten, the demand for US property has only increased in the past year with the sale of thousands of distressed properties. This has led to a 0.6% increase in prices. In economics, a decrease in supply and an increase in demand means more competition and higher prices for investors looking to buy property.
The good news is that it is not too late. Banks are practicing alternatives to home seizures such as selling foreclosed property for less than the amount owed on the mortgage, a practice known as “short sales.” Short sales have accounted for 35% of the home sales last month. Short sales allow for properties to be sold at prices way below the market value. Now is the time to purchase property before prices rise to a competitive level. However, buying quick is not the same as buying smart.
There is a big difference between good short sales and bad short sales. Quality short sales are hard to come by and are often gobbled up by professional real estate companies. This is one of the reasons why trying to invest in US property on your own is so difficult. Regular listings that are available to the public are usually for properties that need thousands of dollars in repairs or are located in high crime and unemployment communities. In order to avoid some of these common pitfalls, you should consider buying property with a consulting company who grants you access to the necessary accounting and legal resources. The most reliable companies will charge you a small fee such as $1000 for becoming a member. Companies do this as a way of separating the serious investors from the window shoppers.
If you are even considering buying U.S property then now really is the time to act. If a few years, when prices completely stabilize, you will have lost the opportunity to gain 15% to 18% returns. There is no other investment opportunity in the world that can offer you equal returns. Just remember to make sure you do your research and find the right company to help you along the way.