The United States housing bubble is an economic bubble affecting many parts of the United States housing market in over half of American states. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and reached new lows in 2012.
- Existing Bank Inventory, Foreclosures grew up, especially the Delinquent Mortgages (missing payments according to the mortgage contract) and Underwater Mortgages (properties registering a negative equity) which rose significantly.
- How the prices were affected? Housing prices in the U.S. have fallen more than 30% nationally since 2006. Even in some major metropolitan areas, decline is much greater between 50%-60%
- Current prices $50-70%/SqF are below replacement cost
- Prices have started to come back, but only marginally and in a small number of areas
- Each foreclosure creates a new rental unit and a new renter
- Considering the U.S. population is growing by 3 million people per year, and lack of new construction is already creating housing shortage, the rental rates are at all-time high and will continue to rise as housing supply fails to meet growing demand
The National Association of Realtors’ chief economist and Senior Vice president of Research at the N.A.R Lawrence Yun, says “prices—and buyer confidence—will keep rising. But don’t let that lead you to make a hasty purchase”.
According to Realtor.com Market Trend Report, 1,944,018 properties were listed for sale last month, median list price was $199,500, median age of inventory 93 days. This report highlights a strong continuation of equilibrium-orientated trends identified last month
What does it mean to you?
- You can buy a fully-renovated and currently-tenanted investment property in the US for under $100,000, which is less than the replacement cost
- Ensure clean title (no liens, taxes, work orders, etc.)
- Complete required renovations. Property has been inspected and renovated.
- The selling company will take care of all aspects of closing, including assistance with funds transfer, U.S. bank account, insurance, etc.
- Hired a skilled property manager
- Install good quality tenant with 1-2 years lease (credit rating and rental history is mandatory)
- The property rent out for &750-$1,000 per month
- The property will generate an immediate 6-7% cash on cash return per year
- The value of the property can go up by 10% per year for the next five years, and still be less than the peak price in 2007.
A once in a lifetime combination of events has created an unprecedented opportunity for Canadians to invest in the U.S. real estate market. The U.S. banking and mortgage crisis has flooded the market with properties selling at huge discounts to peak value and well below construction cost. The strong Canadian dollar makes purchasing a U.S. property something that every real estate investor should consider.
This "Triple 5" package benefits is a peace of mind Advantage:
- Five year rent guarantee (guarantees 80% of base rent on an annual basis)
- Five year property management agreement with experienced professional property manager
- Five years of US tax return prepared by qualified tax accountant
If you are an investor ready to make money, contact me right now.