The US Real Estate Market Is Not All Bad! – Yet.

I am not going to ‘gloom and doom’ you today with regards to the difficult real estate market in the USA, it’s not all bad news and like every market, there are a few bright spots although they may become less bright in the near future …

1. 35% of the homes in the USA do not even have a mortgage.
2. 94.88% of mortgage loans are performing.
3. The biggest foreclosure problems are in Michigan, Ohio & Indiana – the US states with the heaviest job losses in the manufacturing sector. California, Florida, Nevada & Arizona have suffered because of over-building and 25% of the foreclosures in these states are on properties held by speculators.
4. Although 1 in 196 households is facing foreclosure, that means only 5 in every 1,000 is facing foreclosure.

And not all real estate markets in the USA are declining. According to Realtor.org here are the top 10 cities where home prices are bucking the downward trend, the median home price and how much prices have risen in the last year.

1. Salt Lake City, Utah; $233,100; 21.9 percent
2. Binghamton, N.Y.; $111,200; 19.8 percent
3. Salem, Ore.; $227,900; 16.7 percent
4. Farmington, N.M.; $201,900; 14 percent
5. Allentown-Bethlehem-Easton, Pa.-N.J.; $274,500; 12.8 percent
6. Beaumont-Port Arthur, Texas; $127,700; 11.8 percent
7. Reading, Pa.; $157,800; 11.2 percent
8. Glens Falls, N.Y.; $175,700; 10.7 percent
9. Spokane, Wash.; $197,700; 10.4 percent
10. Cumberland, Md.-W.Va.; $109,300; 9.3 percent

The vast majority of the North American boomers that are buying vacation homes or retirement homes in Costa Rica that I have personally dealt with certainly fall into the A: ‘Do not have a mortgage’ or the B: ‘Performing loan’ category so they are still buying in Costa Rica although the numbers have declined in the past 4-5 months.

Talking about mortgages, did you know that the largest home loan lender in the USA Countrywide Financial Corporation (NYSE: CFC) now has substantial operations here under the name of CFC International, Costa Rica and is moving a lot of their operations into a 36,153 square foot totally remodeled building in Calle Blancos, San Jose?

As you will have noted from my Protect Your Assets – The ‘Perfect Storm’ may be about to wipe them out… article a few months, I remain convinced that the US market will be soft for another few years and US mortgage delinquencies and defaults would rise in 2008.

Interestingly enough, Morgan Stanley’s chief US economist Dick Berner, known as the “resident bull” used the exact same expression on 11th December 2007 when he “issued a full recession alert for the US economy, warning of a sharp slowdown in business investment and a “perfect storm” for consumers as the housing slump spreads.”

On the 12th December 2007 Anthony Bolton, the legendary Fidelity fund manager said that: “I remember that the effects can take some time to work their way through, but when they do, they act like a cancer – starting in one area and then slowly spreading to others. I would expect the contagion to seep into most stock markets.”

However, since the Costa Rica Free Trade Agreement was passed earlier this year, we are seeing a dramatic increase in the number of companies from the US, Europe and China exploring the possibilities of opening up operations in Costa Rica.

I am not at liberty to divulge more at this moment but the amount of new development that we will see in the capital of Costa Rica, San Jose over the next few years and the dollar amounts that are being discussed are like nothing this country has ever seen before so yes! For the most part, I remain extremely bullish about Costa Rica real estate.

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Written by Scott Oliver, author of How To Buy Costa Rica Real Estate Without Losing Your Camisa and Costa Rica’s Guide To Making Money Offshore.

Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.