The economic downturn is making the unthinkable possible

Buying housing that you cannot afford is no longer solved by creative financing options. Instead, the solution is given by affordable housing. In a recent article by Time, How the Housing Market Is Fighting Its Way Back, we meet first-time homeowners who have benefited from deals offered by the economic recession and now live in houses that they could never imagine being able to buy.  What we see is a housing market that is getting healthier and where more opportunities are created.

Like so many other reports, this article addresses the hot topic of detecting the bottom of the economic downturn, here by looking at data on housing affordability. Fiserv is a resource when it comes to price indexes and they have compared U.S. home prices to household income. The latest figures show that homes are today only 7% more expensive than they were in 2000, before the real estate bubble.  As this gap diminishes we can expect more people to enter the housing market and purchase the home that was once beyond consideration.

How to end the High-End Real Estate freeze?

The key to selling high end properties lies in foreign investors

According to this recent Wall Street Journal article, the housing market is diving into two sections. The sales for low to moderate priced homes are on the rise, but sales for high-end homes are frozen. Price declines for high end homes are expected to accelerate.

So on the one hand, the market is turning up. But for the high end properties, there are apparently no buyers to stimulate this market, at least no American buyers. There is no doubt that such an imbalance in the real estate market can create some problems. If this trend continues, then high end properties will continue to decrease in value, and the overall economy could lose some significant capital.

But there is hope. If there are no domestic buyers, there is still a whole world’s worth of real estate investors who will be interested in American real estate. The key to increasing high-end real estate sales is to attract foreign investors into America and entice them to purchase real estate. Since high end properties are decreasing in price, it can be a very sound investment for international investors. The government should implement some new policies to ease the process of foreign investment in real estate. These investors, be they from Europe, China, India, Japan, or Australia, they can be our economic saviors.