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.

Homeowners hoping to reduce property taxes

With the economic crisis, the real estate market crashed significantly and home valuations made just last year are no longer accurate these days. No wonder homeowners from all over America are applying for new valuation assessments and getting tax reductions for their property.

This goes to show that the US government does have established institutions ready which can help bring out something positive even in the worst of times. The tax system may be a hassle at times, but it is not all bad is it?

To read more details about the process for tax reduction, read the full article from the Wall Street Journal

Consumer Confidence vs. Housing Price

Consumer confidence is down, so is the housing market. Are there any correlations? According to a report by Radar Logic, this occurrence has been true since 2007, but not necessarily in the previous years, when home prices shot through the roof while consumer confidence remained relatively flat.

Housing Values Shape Consumer Confidence [The Real Deal]