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Bad news for US, opportunities for Brits? - 27 June 2007
Continuing worries in the US mortgage industry have been blamed for the surprise results from the biggest Stateside housebuilder showing a loss for the second quarter of this year, representing a swing in fortunes to the tune of around half a billion dollars compared to the same time last year.
Lennar also announced a gloomy forecast for the rest of the year, and revealed that it’s average house price dropped by 7.5 per cent in the same period. Quoted in the Times, Chief Executive Stuart Miller said, “…we continue to see weak, and perhaps deteriorating, market conditions. We currently expect to be in a loss position in our third quarter.”
The crisis in the housing market in the US could be the perfect opportunity for UK investors with a medium to long-term view to grab properties at below the normal market value. Discounts on new build properties of up to 40 per cent have been reported.
The market conditions in the US housing industry have largely been blamed on the sub-prime mortgage market. This is the business of lending to customers with little or tarnished credit records, and has led to record statistics on defaulting payers. In an attempt to cover their losses, mortgage companies have been forced to raise their rates to 6.60 per cent, reducing the demand for properties.
UK buyers who finance their US property purchase in the UK are protected from the fluctuation in the US mortgage market. Our latest Florida On Demand Radio Show explains the process.
Sterling has also had a good week, with exchange rates against the US Dollar approaching the same high levels of earlier in the year. As well as making US property even better value, buyers on many of the Caribbean islands could benefit where prices are quoted in Dollars.
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*Subject to a written positive RealtyCheck, Onpulse property offer to fully refund the client any initial conveyance fee to our Partner Live Overseas should they not wish to proceed with the purchase based upon any legal matter raised by Live Overseas relating to the property title that did not form part of the RealtyCheck Report. This refund is up to a maximum of £1500 per client.