The US property market, or more specifically, the US mortgage lending market has been blamed in many quarters for the global credit crunch we are now all suffering. While it is true in many ways that the reckless lending of sub-prime mortgages to domestic customers in the US was one of the catalysts of the global recession, it was not the only cause, and the recession would have happened in some form or another in any case.
In addition to the lack of spare cash floating around at the present time, the record exchange rate levels that were seen between the US Dollar and Sterling over the summer have swung completely in the favour of the US in the present market conditions. Gone are the days of getting two Dollars to the Pound, replaced by the situation seen at the worst times for Sterling of near-parity of the currencies.
This weakness in Sterling has made it harder for British buyers looking to buy Stateside in the current market, but has highlighted the value of using a specialist currency exchange company to handle the exchange of your funds. By using a tool known as forward buying, people who decided to buy when Sterling was strong would have been able to fix their exchange rate for up to 18 months into the future, therefore making sure they got the best possible deal on their Dollars.
The relative strength of the US Dollar has led many investment specialists to look to the US for the first signs of a recovery in the economy and property markets. While there has been virtually no good news so far, and no-one is even contemplating any discussion of green shoots, the US property market is desperate for buyers.
This leaves agents and developers offering some of the best deals to be found anywhere in the overseas property market in order to try to attract as many of the pool of buyers who are still interested in overseas property as possible.
Agents are telling a story of some kind of recovery in the pipeline, and sales of property to people who took advantage of the favourable exchange rate. David Giles, director of Property Deals Florida, said, “The reality is that there is more sales activity now than four months ago. However not all the bad news is out and prices will probably not bottom until Obama’s financial stimulus package hits in the second half of 09. As I tried to tell all my clients six months ago, buy your Dollars now and buy property within a year. The dollar was then over two to one and it is now 1.35 to one. A couple of my clients did that and have a 30% gain.”
The property market is therefore in a situation that is unlikely to be repeated for many years. “A large number of high-quality condos are nearing completion in some of the most chic areas of Miami and due to a plunging property market are available for anything up to 40 or 50% below off-plan prices quoted two or three years ago. Miami has, like many cities, undergone several boom and bust cycles and now is a very good time to buy. Nothing new is starting construction as developers simply cannot get finance as the credit crunch continues, so current stock needs to shift and be absorbed into the market. Once this process is over, perhaps in a window of up to two years, recovery and inevitable price rises will prevail once more.”
BuyAssociation.co.uk features investment guides about various regions of the U.S. including Florida, Arizona, New York and more.
Guides for US regions include:
Arizona: http://www.buyassociation.co.uk/
Las Vegas: http://www.buyassociation.co.uk/
Florida: http://www.buyassociation.co.uk/
and New York City: http://www.buyassociation.co.uk/
