Bangalore: U.S. is the worst hit country by the vicious circle of recession; however, this sorry state of affairs has been capitalized to its core by some. In spite of a record of 2.9 million foreclosures which highlighted the extraordinary collapse of the property market, investors from India, China are keen to take advantage of the situation and invest in property in U.S. According to the National Association of Realtors, 2011 U.S. continues to remain a top destination for foreign buyers as international purchases surged by $16 billion this year, one of the highest increases in recent years . The huge price drops in the house prices have motivated the people in India to make full utilization of the opportunity.
Foreclosed properties in certain states are selling at a 40-50 percent below market value (BMV), hence it is believed that these can deliver significant returns on investment to cash-rich investors and perhaps one day capital will return if house prices rise.
Cities like Los Angeles, Las Vegas and other parts of southern California and Phoenix, and Miami are the hot favorites for Indians to invest and the prices are still 60 percent lower than the peak. At the peak of the economic boom these properties were selling at close to $250,000 (11,250000) now it is available at $82,000 (36,90000) and $85,000 (38,25000) each for a three-bedroom condominium.
Among all the cities Florida recorded a highest among all with 31 percent of total international transactions this year. California had 12 percent, Texas had nine percent, and Arizona rounded registered six percent of international transactions.
The average price of homes in New York is about $1,300 (or Rs 58,500) a sq ft whereas the same will be available in Mumbai's for Rs 80,000 a sq ft. This very well shows that India seems to be on cusp of recovery from the global meltdown and property prices in U.S. have been declining for 57 consecutive months now.
According to the U.S. National Association of Realtors, the total residential international sales in the U.S. for the year 2010 was $66 Billion which went up to $82 billion in 2011 and among this $82 Billion 7 percent of total international home sales is contributed by Indians, the Canadians with 23 percent and the Chinese with 9 percent. The year saw the highest home sales in America after the meltdown and the largest purchase in value terms by the Indian community in three years. The report further stated that international and domestic sales of houses in the U.S. were $1.07 trillion in the year ended March 2011, up from $907 billion in the previous year.
One of the strong motivation for Indians to invest, is Reserve Bank of India's relaxation of foreign exchange rules in 2007. The RBI has remitted up to $200,000 (9000000) a year now, which was $100,000 (4500000) earlier. This means now a group of five has the opportunity to invest $1 million in a year. The fact that U.S. has been the major center for higher studies has also contributed in its growth of investment in property. The colleges and universities have a significant number of international students, and some foreign families are purchasing U.S. properties in college areas so that their child has a place to live. The international demand for U.S. property is also because of the foreign executives temporarily working in the U.S. as some of them have opted for purchase of their own residence rather than renting.
With prices being down and forecloses up, this is the best time to get your own residence in U.S. as the opportunities seem stronger for you to get your dream home at a very reasonable rate.