Ever since the fall of the housing market several years ago, there have been many signs that the US housing market was beginning to comeback. For Canadians buying US real estate, this is great news because they could not have invested at a better time in the real estate cycle. What with the Looney at an all-time high against the US dollar coupled with fire sale prices on millions of US property, it seemed like a worthwhile endeavor.
However, the signs of recovery were short lived as the US economy slipped deeper into recession. According to an analysis made by Deutsche Bank, they noted about seven short-lived real estate recoveries in the last six years of the real estate market collapse.
Value of Homebuilding Business Booming
One of the positive parameters that the real estate cycle is moving in the right direction is when stocks of homebuilding firms begin to rise out of the doldrums. It is noted that just in the past nine months, their value has more than doubled. For Canadians buying US real estate, this is great news these gains mean the stocks offer a lot of possibilities.
Shortage of US Inventory
The primary reason why these stocks are enjoying gains in their value is because there is an imminent shortfall of US real estate property. This means more new homes need to be constructed to offset the difference. During the height of the housing crash, new home construction fizzled to almost nothing as there was no demand and an oversupply problem haunted the American heartland.
Today’s figures are still relatively low compared to the boom years where it averaged 1.1 million new homes constructed per year. Present figures show only 475,000 new properties in three years!
According to Ivy Zelman, a prominent Wall Street analyst that predicted the 2006 US housing market crash, there are several reasons why investors should be optimistic this year: small US property inventory and a bottoming out of US real estate prices on a national scale which will provide the stimulus to push ambivalent real estate buyers to finally purchase that home because of skyrocketing rent all over the US.
Florida Real Estate on the Upswing
Probably one of the hardest hit states during the housing collapse, Florida has seen better days as many places like Fort Lauderdale real estate took a beating during that time. Today, that trend is reversing. The evidence? A new housing development in Delray Beach Florida. According to reliable sources, potential housing buyers began to line up as early as dawn. The result? 44 properties were sold in just one weekend! The last time activity like this was seen was during the late bubble just before the collapse.
Good News in Other Places in the US
Not only is Florida recovering, several places in the US like Indianapolis, Houston, and Dallas are showing robust new home construction. This is based on a study collected by field researchers on new home construction sites all over the US. Current data suggests that new home construction is just 20% compared to the peak of the housing market in 2006, but this is a very good indicator that the real estate market is already on the right track to a full recovery.
