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Property ‘Vultures’ Feast On US House Price Crash
March 19, 2009Article by Ray Withers
London (11 March 2009) – Property ‘vultures’ are picking over the bones of the US housing market crash, according to a leading international property investment firm, Property Frontiers.
For property investors with cash to hand, now is the time to consider buying because prices are pretty much at rock bottom and distressed US property is for sale at bargain basement prices.
Oxford based investment consultants Property Frontiers has considerable experience in the US market.
“The credit crunch and resultant recession in the US has created what could well be deemed the greatest buying opportunity of our generation,” said sourcing manager Ben Jefferis.
Highly profitable projects have been left at best breaking even, and developers are resorting to ever more creative ways to incentivise buyers. The drop in the US market has not only been confined to the obviously over-supplied cities such as Las Vegas and Miami.
“Those markets with strong fundamentals have also been dragged down into the mire and now offer the ’vulture investor’ a great opportunity to pick up some exceptional deals from distressed developers.”
The latest US property price figures compiled by data firm www.zillow.com make appalling reading for 2008:
- House prices are down year-on-year 11.6%
- 34% of homes sold at a loss
- 1 in 5 property transactions is a foreclosure
- 41% of mortgages started in the past five years are in arrears
- 17.6% of all mortgages are in arrears
The average US house price is $192,119 (£138,998). Many developers are selling at break-even or a loss to settle crippling development costs.
For example, Property Frontiers offers investors discounted US property at Cane Island, Florida, comprising a luxury appointed resort comprising of 260 two, three and four bed apartments in a gated compound. The expected gross annual yield is about 14%. The apartments are priced from $150,000 – $200,000. To buy, an investor needs to input about $58,000 in cash to cover the deposit and purchase costs. All the Cane Island apartments are delivered fully furnished as a turnkey development. Kitchens have a full-sized washer and dryer, refrigerator, microwave, glass-top range and dishwasher. The development is just a few minutes from Disney and the major theme parks. The developers state that the current Kissimmee property market means selling prices are less than build costs for the apartments – representing a massive 54% discount on sale prices when the development first came on to the market.
For more information contact Property Frontiers on +44 (0) 1865 202700.