The United State of America is one of the most influential countries in the world, with a population of over 300 million and a land mass in the region of  9.6 million km2.  The country is made up of fifty states, one federal district and fourteen additional territories, although the country’s influence and power spreads far wider.

Introduction To The USA

The country covers such a huge area of land that it also incorporates nearly every possible climate and terrain which you could ever hope to see. From the bitter cold of the state of Alaska to the searing heat of the Mexican border, the country also takes in long flowing plains as well as the Rocky Mountains - it really does have everything.  The USA has one of the most developed tourism industries and it is not hard to see why when you consider the climate, the landscapes and the vast array of interesting places to visit, something for every man, woman and child.

Since the recent increase in terrorist activity the country has been very much on red alert for further incidents, and this has encouraged something of a lock down mentality towards foreign visitors - strict searches at airports are now common place.  The work environment has changed for overseas visitors and it is currently near impossible for foreigners to obtain US residency.

It will be interesting to see how the future pans out as the US has always been one of the main tourist attractions of the world, but the current political environment is not exactly encouraging growth in this area.  The Americans themselves have a great ability to bounce back from set-backs in the past, and have a great ability to pull together in times of trouble.

Property Market in The USA

While the US property market is very diverse, offering every kind of property and area you could ever consider, there is no doubting than in general property has been in vogue for the last 4 or 5 years. The returns on property have been enormous, with double digit annual increases the norm in many areas of the country.  Like the various stock market rise of the past, each and every American citizen seems to have profited from the rise in property - but where will it all end?

Unfortunately, the cracks are already starting to show in the market with personal debt at unmanageable levels, and many home owners stretched to the limit. Slowly but surely the market has been squeezed as the Federal Bank raise interest rates to try and slow down the runaway train which is the property market.  Recently there have been problems with a number of the companies who service the mortgage market for those with low credit ratings, one of which went under in a blaze of publicity.  This is very often the first sign of cracks in the market.

Home ownership in the US has always been around about 65% mark for the last 20 or 30 years, although recently it has crept up to just under 70% - a large jump when you consider there are 300 million people in the country.  This demand for property has squeezed prices higher, although as the defaults continue to mount up (1.5 million Americans are expected to lose their homes in 2007) the balance may well swing in favour of the sellers. 

While many of the US population are living the investment dream, seeing their house prices rocket over the last few years, they seem reticent to acknowledge a turning tide in the sector.  There are fears that the market could come crashing down in the short term with a glut of new developments due to come online this year.  If the stock market were to take a sudden fall, this may well focus the minds of the investment savvy US population who often leave it until the last minute to act.

Buying Property in America

The process for buying a property in the States actually mirrors the US thirst for short cuts and cutting out the middle man, with a vast number of purchases actually completed without the need for legal representation.  For those who thought the UK property purchase process was fairly straight forward, the US is in a different league.

When a buyer expresses an interest in a property the two parties will then draw up a standard legal document specifying the property and the offer price.  The buyer will be expected to forward a deposit of a few thousand dollars to the seller, and this will be none refundable.  When the searches and registration documents have then been drawn up, the deal is ready to be signed.  Many transactions in the US have been completed within 2 weeks, although no transaction should take longer than 90 days.

There are no issues with foreigners buying property in North America and many expats have persevered with the immigration system, which can often take years before US citizenship is established.  Areas such as the sunshine state of Florida have proved extremely attractive to UK and other foreign buyers, due in the main to the weather, welcoming atmosphere and beauty of the area.

While the purchase process is very straight forward, it is essential that you keep track of changes in the immigration system which has been tightened up over the last few years. While Green Cards (working cards) are hard to come by, acceptance of official US residency is even more rare these days.  The authorities run a very tight quota system with many applicants waiting years to be even considered.

Future Property Market

As we approach the half way point of 2007, the immediate outlook for the US property market is not encouraging. While many home owners continue to live the dream, often ignoring bad news along the way, there are signs that a major reality check will soon be on the way.  While it will be no bad thing in the short term, many US residents will be financially scarred for years to come - and as mentioned above, a massive 1.5 million are expected to lose their homes in 2007 alone.

The authorities have tried their best to discourage over exuberance in the property market, but buoyed by a rising stock market many Americans have decided to ride their luck a little longer.  For some the gravy train may about to stop, and we should see a move towards more responsible house buying patterns over the next couple of years.

While long term the market has massive potential for substantial growth there may be better opportunities over the next couple of years, after the steam has been taken out of the current market boom.  Caution is the watch word at this moment in time.