The financial crunch and a feeble dollar are not such bad news for the United States property market, Pari daily reported.
The classic business maxim that one should buy at times of falling prices is about to attract large-scale real estate investment from all over Europe and a number of Arab countries. Bulgarian property companies, working with American partners, have already observed increased demand from Bulgarians for houses and holiday properties in the US, Pari said.
We can't talk of a massive interest in the US property market, but we've been receiving enquiries for several months now, RE/MAX Chance group manager Simeon Mitev told Pari daily. Several locations have been turned into lucrative property investments following price slumps. Enquiries from Bulgarian investors are directed primarily to Florida and big cities such as Las Vegas, Los Angeles and San Francisco.
Lux Imoti real estate agencys manager Nikola Stoyanov thinks that the US market is targeted mainly by Bulgarians who have business there and travel frequently to the country. They want to acquire properties for personal use rather than for speculative purposes, Stoyanov explained. Bulgarian interest in US property dates back several years, aided and abetted by falling prices, he added.
Given the dimensions of the US market, it's difficult to provide summary data for the scope of the crisis. However, some brokers overseas say that real estate has depreciated by 40 per cent in a year.
Prices have even halved, Teodora Dimitrova, CEO of the US-based ERA real estate network for Bulgaria, told Pari. Homes that cost $400 000 only a year ago are now on sale for $200 000, she said. Brokers from the US-based RE/MAX network said that Las Vegas was one of the cities recording the biggest decrease.
Real estate for more than $200 a sq ft currently sells at $ 90 to 125 a sq ft, Simeon Mitev noted.
Currently, investment in land in Las Vegas is most lucrative because the gambling capital is surrounded by government plots and private properties are limited in number, he explained.
Teodora Dimitrova, said, however, that Las Vegas was a stable residential market with a rapidly growing population. A property there changes ownership every two years and the population has increased from 0.5 million to two million people over the last five years, according to statistics.
The other attractive destination is Florida. The city of St Augustine has survived the blows of the global crunch almost unscathed compared to other parts of Florida because it's an interesting tourist destination with historical landmarks, combined with lavish opportunities for surf and shopping, RE/MAXs executive Simeon Mitev commented, quoted by Pari daily. Prices in St Augustine are expected to rise, accounting for current investor interest in buying residential properties there. Investors hope to reap quick returns from capital gains.
However, brokers are still divided as to whether the current period is the right time to invest in American real estate.
