As reports of the US glooming economy keep appearing, many US residents fight for their financial survival. According to latest new sources, there is now a huge surplus of unsold housing which is unlikely to shrivel fast.
In August, median house prices in the US fell to 6 percent, or $221,900. This is the lowest since the past eight years when the country was on a high with a huge property boom, especially along the coastal regions. What many couldn’t afford back then might well become affordable soon as property prices keep declining.
While the US market is certainly not promising for US residents right now, overseas investors with enough cash flow could certainly be in the right place at the right time. As more and more Americans are driven to foreclosures and forced to rent, property investors have a huge opportunity with a market that is likely to grow.
Since more people are forced from their homes, all they will have left is money to rent. In worst case scenarios, this might not even suffice.
Another and even more worrying fact for Americans is the current job market. It stands now at a job loss of 685,000 jobs in 2008 alone. Unemployment is at a five year high with 6.10 percent. As factories keep losing orders, workers keep losing jobs.
With already dire financial situations for many, the current state in the economy is certainly not great.
Unfortunately, where there is misery there is also luck for some. For those investors with very good cash flow – prepared to hold on to their investment for two years minimum – there is a great opportunity now to buy affordable real estate in the US.
As Yahoo Finance reported at the beginning of last month, some 10 million house owners have more debt in the country, than their property is currently worth. Analysts even went as far as to say that the current situation might run out worse than the Great Depression.
One thing is certain, for those who do struggle financially it means to pull the belt very close to the hip and try any means possible to save money.
At least until the market will recover. Credit Suisse estimates that the median home price ratio to household income is likely to return to the average of 2.86 percent in about 18 months.
Photo credits: Maury McCown [via Flickr]