Ask The Urban Refugee: Should Non-US Residents Jump-in?
“I live overseas and am thinking it may be a good time to invest in real estate in the States.”
Is it Bargain Hunting Season?
I am living overseas but being from New England I am looking at NH in particular. The thought of searching and purchasing from so far away is daunting…. Any advice? Is this a good idea?
Thank you,
Elektra, Singapore
Dear Elektra,
Thanks for your great question & in true Urban Refugee form I am going to say “Yes…and No!” What I mean is that currency differences argue strongly for spending Yen, Pounds, Euros - just about ANYTHING in land of the weak greenback. The parallel phenomenon of sliding prices and increasing numbers of foreclosures also seem to argue for jumping-in. I recently heard a radio talk show host speaking about real estate say “America is On Sale!” and I tend to agree.
So where is the NO part? I have two reservations, neither of which are deal-killers but should at least be considered.
First, the Upper Valley of NH & VT isn’t a bloodbath (Dartmouth & DHMC continue to act as people-magnets) and although we have been pulled down by the crisis as a whole, I feel that we don’t have “the flu” so much as we have “the shakes with a low grade fever.” What does this mean for local real estate? Well there certainly is more to choose from. (The inventory of unsold Hanover & Lebanon houses is at a historic high.) But the caution is that not all prices are represent good value because not all sellers share the same motivations to sell.
Investing in Lifestyle
Here is an example: A buyer client that I had been working with for a couple years saw a foreclosed property that met their needs enough to enter the daunting process of buying from a national bank. We agreed that the price was good, perhaps even excellent. The price represented a 30% reduction from the prior purchase price of the house! Bang - they immediately offered full price. (The process was SUCCESSFUL BUT EXHAUSTING, clearly a topic meaty enough for whole other post!) Two weeks later with another buyer client we happened upon another foreclosed property that would work - same bank, same agent. We were astounded by the coincidence but took it as a sign, THIS WAS MEANT TO BE! Alas, the asking price represented 95% of the last asking price for a house that had not moved after 2 years on the market. Of course our offer went nowhere. The moral of this story is that the clear bargains are fewer than reports indicate and the opportunities tend to open and close quickly.
The second concern is owning from a distance. Again, not a walkaway factor but something to consider. The best kind of investment at a distance is one that gives you joy of ownership along with a financial return. If you, your family and/or friends can use the property a few times a year or if it will ultimately be a place to call home then there really hasn’t been a better time in memory to jump-in!