Go Back To Article List

Lower House Prices Tempt Cash Buyers

Posted Sunday, June 26, 2011

The US housing market has for many years been a good indicator of the strength and performance of the nation’s economy. This fact came to the fore when the US economy went into recession. There were a high number of foreclosures, where banks called in their issued mortgages as the homeowners were unable to meet their repayment obligations. A lot of these had to do with sub prime mortgages, where the homeowner took out a mortgage they could not afford.

With a badly hit economy, fewer people are able to take out mortgages. This, coupled with foreclosed homes and banks that are unwilling to provide mortgages, especially to a population with reduced incomes and fewer jobs, has seen the housing market plummet to lows never experienced before. These lows have also resulted in homes being put up for sale at unreasonably low prices. Prices for homes have dropped by up to 40 per cent.

The people who have benefited most from this situation is those buying up houses with cash. These are mainly investors with liquidity. They are motivated by the fact that house prices are at record low prices, the desire to make money from renting out both residential and commercial real estate property and the still dim hope of a recovery in the US economy that will see the eventual rise in cost of homes and property across the USA.

Across many states in the US, between 30 and 60 percent of all homes purchases are cash purchases. In states like Las Vegas, also referred to as the foreclosure capital of America, up to 63 per cent of homes bought in the first quarter of this year were cash purchases. And in Fort Lauderdale, Florida the figures were over fifty per cent of all homes purchases.

As investors, we are interested in buying homes across America. Basically, we buy houses with the aim of selling them off when the economy finally turns around and more people start buying homes again. We believe that at that point, the cost of homes will go up and we will be able to get good returns on our investment.

We also believe that, as cash buyers of homes across America, we buy houses and this help prevent further deterioration of the housing markets. This means that we help prevent the cost of homes from dipping even further. We also understand that despite a bad economy, people need to live in homes. We therefore offer residents and families with affordable rental homes where they can live in tranquility.