Post by unlawflcombatnt on Jun 4, 2007 0:43:53 GMT -6
As if American investors hadn't contributed enough to the U.S. housing bubble, we've gotten help from our "friends" in Great Britain. Apparently a large number of overcompensated British speculators have also contributed to the U.S. housing bubble. In a story from Patrick.net, originally published in the British Daily Mail, titled Britons count the cost of the Florida property slump, British investment in U.S. housing is discussed. Happily, many of them are getting burned on their investment in the U.S. housing market. Many are trying to pull their money out now, and are losing heavily. All I can say to that is: "Good!"
"Hundreds of British investors who pumped their money into Florida's soaring housing market have been caught out in its spectacular collapse.
Many bought apartments off-plan, hoping to sell them on at a huge profit as soon as they were built.
However, they have been left with property they can't sell - even for less than the original price - because of rising interest rates and a glut of condominiums for sale.
Florida house prices have been plunging for 18 months, but research shows investors in high-rise condos have been hurt the most.
Miami lawyer James Ryan said he had 40 clients, including British investors, trying to get out of contracts even if it meant losing substantial deposits. One client abandoned a £170,000 deposit rather than complete on a £800,000 condominium now worth only £600,000.
Condominiums in America are like flats in Britain - only usually much larger.
The market had been rising since 2003 and speculators, tempted by glossy advertising, rushed to buy as prices soared 25 per cent a year.
Florida property consultant Jack McCabe said: "Out of staters and foreigners, especially the British, flocked here and pushed the market to the point where about 70 per cent of all sales were to investors who never intended to live in what they were buying."
The market reached its peak in late 2005 when some developers were forced to hold lotteries because they had so many buyers after the same properties.
Now the bubble has burst, investors are being forced to dump them. Some bought five or six units, obtaining attractive mortgages with low interest starting rates for about two years.
However, as the mortgages revert to high interest rates they cannot afford the payments.
Many buyers either default on their mortgages or simply walk away.
Estate agents estimate at least 800 Britons have been caught out by the slump but the real figure could be four times that.
U.S. investor Tom Leon, 72, was philosophical. He said he planned to give up £100,000 in deposits on two condos in Miami, having made money at the height of the boom.
He said: "There's a time to hold and a time to fold, and in my opinion, this is a time to fold."
Others believe this is the time to buy. One developer who has just finished a 200-unit tower said 45 had been snapped up at pre-2003 prices.
Estate agents estimate 1.2million Britons own homes in Florida."
To put the value of the loss in terms of dollars, £1 (1 pound) = approximately $2. Thus, abandoning a £170,000 deposit, is the equivalent of abandoning a $340,000 deposit.
"Hundreds of British investors who pumped their money into Florida's soaring housing market have been caught out in its spectacular collapse.
Many bought apartments off-plan, hoping to sell them on at a huge profit as soon as they were built.
However, they have been left with property they can't sell - even for less than the original price - because of rising interest rates and a glut of condominiums for sale.
Florida house prices have been plunging for 18 months, but research shows investors in high-rise condos have been hurt the most.
Miami lawyer James Ryan said he had 40 clients, including British investors, trying to get out of contracts even if it meant losing substantial deposits. One client abandoned a £170,000 deposit rather than complete on a £800,000 condominium now worth only £600,000.
Condominiums in America are like flats in Britain - only usually much larger.
The market had been rising since 2003 and speculators, tempted by glossy advertising, rushed to buy as prices soared 25 per cent a year.
Florida property consultant Jack McCabe said: "Out of staters and foreigners, especially the British, flocked here and pushed the market to the point where about 70 per cent of all sales were to investors who never intended to live in what they were buying."
The market reached its peak in late 2005 when some developers were forced to hold lotteries because they had so many buyers after the same properties.
Now the bubble has burst, investors are being forced to dump them. Some bought five or six units, obtaining attractive mortgages with low interest starting rates for about two years.
However, as the mortgages revert to high interest rates they cannot afford the payments.
Many buyers either default on their mortgages or simply walk away.
Estate agents estimate at least 800 Britons have been caught out by the slump but the real figure could be four times that.
U.S. investor Tom Leon, 72, was philosophical. He said he planned to give up £100,000 in deposits on two condos in Miami, having made money at the height of the boom.
He said: "There's a time to hold and a time to fold, and in my opinion, this is a time to fold."
Others believe this is the time to buy. One developer who has just finished a 200-unit tower said 45 had been snapped up at pre-2003 prices.
Estate agents estimate 1.2million Britons own homes in Florida."
To put the value of the loss in terms of dollars, £1 (1 pound) = approximately $2. Thus, abandoning a £170,000 deposit, is the equivalent of abandoning a $340,000 deposit.