In a speech last week, Federal Reserve Chairman Ben S. Bernanke says, “an overhang of distressed and foreclosed properties, tight credit conditions for builders and potential homebuyers, and ongoing concerns by both potential borrowers and lenders about continued house price declines have held back the housing market.”
This comes after more data confirms that, as of June, residential real estate prices have dropped the most in 19 months, indicating that the housing market continues to hamper the U.S. recovery.
US Property Shop Founder and CEO, Richard Dolan, says, “While I am certainly not happy for the ongoing slide of the US Economy, I must admit that this news from Chairman Bernanke furthers the message of my company. That message is simply that NOW is the time to buy US Property.
The U.S. is experiencing a financial adversity of epic proportions, and although the worst could be behind us, a bumpy recovery for our southern neighbors lies ahead.
“Buying now, during this distressed economy, makes so much sense for Canadians. Our dollar is roughly on par with the US, our lending strength is perhaps at an all time high, and there are instruments in place that allows my company to facilitate the process in a seamless, simple and safe manner. But trust me, this opportunity won’t last forever,” says Dolan.
According to an article on Bloomberg.com, any recovery in home values is probably years away as foreclosures dump more properties onto the market, while a jobless rate hovers around 9 percent. Strict lending rules further hurt potential sales. Furthermore, declining home equity plus the stock price dips of recent is damaging household wealth for millions of Americans.
There are just too many factors that will continue to drag home prices down,” said Patrick Newport, an economist at IHS Global Insight. “We will have a lot of foreclosures in the pipeline, a lot of excess supply and demand for homes continues to weaken.
Consumer confidence is still weak, and the housing sector remains in a fragile state,” Robert Toll, chairman of Toll Brothers Inc. (TOL), the largest U.S. luxury homebuilder, said in an Aug. 24 call with analysts. “The nation’s economy continues to suffer from the lack of jobs in housing construction and the related manufacturing and service sectors that a decent new-home market would typically generate.”
A Ray of (possible) Sunshine?
During his speech, Bernanke said the economy will probably improve in the second half of 2011. Furthermore, housing will likely stabilze “if for no other reason than that ongoing population growth and household formation will ultimately demand it.”