‘Happy Independence Day!’ US proves hot property this Fourth of July as real estate market registers positive growth
- Sales of US existing homes up 4.9% and pending homes up 6% in May 2014, compared to April figures (National Association of Realtors (NAR))
- Forecasts of 5-6% property price growth for 2014 and 3-5% for 2015 (NAR)
- Foreclosures offer excellent opportunity to invest at far lower rates, which Brookes & Co are currently offering to market
With strains of ‘The Star-Spangled Banner’ infusing the air and the traditional fireworks lighting up the night skies, the Fourth of July may be a national holiday for people in the United States to pause and reflect upon their independence, but one arena where there has certainly been no pausing in recent months is in the country’s real estate industry.
In their ‘Housing Market Forecast’, the National Association of Realtors (NAR) revealed that sales of existing homes were up, marking a real rise of 4.9% in May 2014 in the number of homes sold when compared to April. Alongside this there was also an increase of 6% in the number of pending homes sold in the same period.
This positive growth is a big step forward for a market that triggered the property crash that spread its effect globally from 2008, forcing people to drastically tighten their belts and the market to shrink dramatically. Yet with sparks being shown in property sales figures for recent months, upcoming forecasts are also looking healthy, marking important upward movement.
The NAR are forecasting Median Price Growth of between 5-6% for 2014, with an increase of 3-5% for 2015, steady figures that prove growing confidence in the market, at more manageable levels than the booming figures of the 11.5% growth recorded in 2013, fuelled by a lack of housing stock.
As the report explains, there is a great deal of potential remaining in the US,
“The housing market is beginning to roar back… there is sizable pent-up housing demand looking to emerge. The timing is uncertain. But the pent-up demand implies home sales have much room to rise over the next few years.”
Although RealtyTrac have shown in their ‘May 2014 Residential & Foreclosure Sales Report’ that it is the sale of higher end properties that are currently registering the highest percentage change in terms of their share of total property sales, year-on-year, at the other end of the market there is a different kind of potential.
Since the market crash of six years ago, one arena which has witnessed great potential for investors is the sale of foreclosures, or distressed assets. Asking prices for these properties, sometimes in a state of neglect and in need of much work, is far below that of standard properties – RealtyTrac recently revealed that the average price of a US foreclosed property was 37% lower than a standard property, at $120,000 compared to $190,000. These properties make up just over 14% of the US housing stock (as of May 2014) and offer an excellent opportunity for those looking to make a profit.
Philip Button, Managing Director of property investment company, Brookes & Co, explains,
“With the US market showing signs of improvement, now might just be the ideal time to invest and one option looking attractive is that of foreclosed properties. According to RealtyTrac, the popular Sunshine State of Florida holds a third of the US’ inventory of empty foreclosures, four-times more than New York, and within an improving market, not to mention the 5 and a half year high of Sterling against the US Dollar, now is a fantastic time to buy.”
Today it is not just Independence Day that the US should be celebrating; it is the positive signs of growth in the property industry and the potential being offered to overseas investors that should be helping the American flag to fly proudly at full mast.
For more information on investing in the US, contact Brookes & Co on 01621 875 925 or info@brookesandco.co.uk, or visit the website www.brookesandco.co.uk