Foreign condo investment boom amid the US real estate slump

In the United States, the real estate market is showing signs of stagnation again as the government's tax benefits for first-time home buyers have ended. Meanwhile, foreign investors are attracting attention as they are actively investing in condos in the US. Let’s find out more with reporter Yoo Mi-jung.

 

Q) First, it is said that the real estate market in the United States, which seemed to be reviving for a while, is showing a slump again. Could you explain in more detail?

 

A) Yes, construction of new homes in the United States has fallen to the lowest level in eight months. According to a recent announcement by the US Department of Commerce, the number of new housing starts in the United States in June totaled 549,000, down 5% from the previous month. Earlier, market experts predicted that there will be about 577,000 new housing starts in June, but the actual figure was lower than expected.

 

Q) What is the reason the real estate market is showing a downturn again?

 

A) The most direct cause appears to be the end of the government's tax incentives of up to $8,000 to first-time home buyers in late April. It is also pointed out that the unemployment problem continues to show no signs of recovery. The number of foreclosure homes is on the rise, resulting in a failure to pay mortgages due to continued unemployment. According to the US “Realty Track,” which specializes in foreclosure homes, the number of foreclosure homes increased by 38% in the second quarter. Accordingly, the number of foreclosure homes across the United States is expected to reach 1 million this year. As the number of foreclosure homes increases, existing homes are not sold well, leading to lower prices in the housing market as a whole. Experts are observing that the downturn in the real estate market will continue for the foreseeable future as unemployment remains high and housing stocks rise.