Are US prospects looking up for Investors?

Sept. 11, 2009 - PRLog -- When it comes to investing overseas, the last couple of years have thrown up some rather grim stories of plunging property prices and depressed markets. For a long time, the US was one of them, with values dropping and foreclosed bargains being one of the key sources for investment.

But from buying bargains in a crash, the market has been showing some signs of genuine improvement, such as the Standard & Poor's/Case-Shiller Home Price Indices last month, which revealed that its ten-city composite had recorded a 1.4 per cent rise in prices between May and June.

Then there was the National Association of Realtors pending house sales index, which not only rose by 3.2 per cent in July, but in doing so increased for six successive months for the first time since the survey began in 2001.

To put the way the US - which after all was the place where the international economic and property crisis started - is emerging from the situation in a wider context, one may glean much from the Knight Frank Global House Price Index for the second quarter.

What this noted was that the overall position across the globe appears to be broadly one of a decline in values that slowed during the three months to June. Commenting on this, head of residential research at the firm Liam Bailey remarked: "It now appears that house prices are starting to stabilise across the world." He went on to say that while weak credit conditions could potentially halt any improvement, "it does appear that the worst is behind us".

Examining the statistical basis for this view,The latest results from our Global House Price Index show values increased in almost half of the locations reporting price changes for the second quarter of the year. Significantly, quarterly price falls accelerated in only 22 per cent of the locations and did not exceed ten per cent in any country. This compares with double-digit falls in a number of locations during the first quarter."

There are a few cases, noted, where there have actually been price rises on an annual basis, such as Israel and Switzerland. But the improvement of the US may itself was still ahead of the overall curve. In the second quarter it was among the 48 per cent of countries seeing growth, with a 1.3 per cent appreciation in values contrasting with seven per cent falls in each of the two preceding quarter.

Of course, there may still be reason for some caution and the US Federal Reserve's six-weekly Beige Book - which surveys 12 districts in the country for the latest economic indicators - said: "Residential real estate markets remained weak, but signs of improvement continued to be noted." Alongside this were sentiments from the business sector that the economy is "continuing to stabilise" and that firms are "cautiously positive".

Thus the picture appears to broadly show that the world is easing its way out of a major property slump, with the US now being one of the countries back on an upward curve. But the overall economic and property picture in the country could be one of a nascent recovery, rather than one in full swing, which may suggest that investors in the US could do very well provided their projects are based on a long-term strategy.

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