As the global real estate market struggles to rebound from a recent global financial crisis, the lure of owning property in the U.S. is appealing to many.
But the real estate industry has seen a steady decline in the number of qualified applicants over the past five years, and many prospective homebuyers are struggling to secure a mortgage or a loan, making it hard for them to find suitable places to live.
“It’s been a tough year for the real-estate industry,” said Greg Fuchs, managing director at Fuchs Associates.
“The market has been hit by some bad news.
People are struggling with a lot of other issues, but the housing market has taken a big hit.”
Fuchs estimates that the number is at least 60 percent below its peak, before the global financial turmoil.
“That’s the real concern for the industry,” he said.
“It’s going to take a lot more than just the market going through a recession to really see a revival.
We’re going to see a recovery.”
While many U.K. residents have moved to Texas for the opportunity to rent out their homes to the wealthy, Fuchs said the Texas real estate marketplace is a little different than the one in Britain.
“You’re more likely to find a family that’s already established and have some financial assets,” he explained.
“There are lots of people out there with assets that they don’t necessarily have to sell.”
In the U-K, the property market is more diversified, with large-scale developers such as EDF and the Royal Docks building up properties that will appeal to many buyers.
And some homeowners who have never lived in the United Kingdom can apply for their home to be placed in the country.
However, Fumbles’ clients often struggle to find affordable housing, with a growing number of residents finding themselves in foreclosure.
While the number has been steady for a number of years, Fukes estimated that the market has experienced a 30 percent drop in the past two years.
“In Britain, there’s a number [of] smaller properties that are available to buy,” Fuchs noted.
“But we’re seeing a lot fewer of those available, and the number that are being sold are smaller.”
He said that the situation is getting worse for many Americans, especially in the Houston area, as many have been unable to secure mortgage insurance in the wake of the global economic turmoil.
For example, Fuchys said that more than 20,000 homeowners in Houston had not received insurance in at least the past year, according to data from the Federal Housing Finance Agency.
Many have been forced to foreclose on their homes, or have had to sell them, leaving many homeowners with a limited amount of options.
But Fuchs acknowledged that many Americans are choosing to buy in the Texas market, as they are looking to diversify their assets, while at the same time ensuring that they can afford to buy a home.
The market is not without its problems, however.
For example, some local governments are trying to protect the property tax base in the form of mortgage bonds.
The bond market is still in its early stages, but Fuchs is hopeful that the industry will eventually recover.
“We are hoping that in the future, we will see that a lot less people are willing to take on mortgages and mortgage bonds, and we will actually see a lot better performance,” he concluded.
(H/T: The Hill)