Housing Market Rises
Foreign buyers have really been helping prop up the US housing market. It is reported by The National Association of Realtors (NAR) that they accounted for $92.2 billion of US home sales during the 12 months ending March 2014. That is 35 percent higher than the same period last year.
This is good news but it is not helping the country evenly. A good amount of buying is taking place in the coastal markets like Los Angeles, San Francisco, New York and in Florida.
But, Florida, California, Texas and Arizona accounted for 55 percent of international purchases of US homes with 23 percent of that number from Florida alone.
A little over 50 percent of the buying is from: Canada, China, Mexico, India and the UK. China leads the pack with $22 billon but, Canada had the largest share at 19 percent. Also interesting was that 60 percent of all the foreign purchases were in cash.
The housing inventory in certain areas throughout the country is very low, especially homes selling for less than 1 million. The foreign purchases along with the institutional investors (hedge funds and large investor groups) will cause the inventory to be low for many years to come.
It will also cause the housing values to appreciate 5 to 8 percent a year for the next several years based on predictions.
The biggest problem in certain markets is that there is just lack of land to build new homes so it is very hard to bring more inventory to the market.
So buyers just have to be patient and stay on top of what is coming to the market.
But the good news is that our housing market has really stabilized from the horrible days of prior years and we are looking at much better years ahead. Not to mention that with rates still at a relatively low point, it still makes for a great time to buy.
Marc Demetriou has become one of the most trusted and respected mortgage bankers in the state of New Jersey, especially among the accounting and legal community where he is called upon frequently as an expert panelist and speaker. Additionally, he is licensed as a continuing education instructor by the NJ State Board of Accountancy to offer credits to accountants/CPA’s to fulfill their annual licensing requirements.
Demetriou is also a host on The Real Estate & Money Show, along with Antoinette Gangi, airing Thursdays at 10 a.m. on WVNJ 1160 AM or online at: realestateandmoneyshow.com. It explores the relevant topics and enlightens potential investors: buying and selling a home, investing in various real estate opportunities, understanding trends in today’s real estate market and achieving financial freedom by living within in your means.