Don’t let some red hot local US housing markets fool you. For every hot market like Los Angeles, San Francisco, and New York, there are lots of cold areas. We’re talking about a persistent housing recession. That’s the real picture of the overall US housing market.
What’s interesting is that the market still looks like it’s a long way to recovery even after repeated US government interventions. Even after six years of continued federal government aid to boost the housing market, it remains that a large chunk of the overall market is still stuck in neutral. This is simply puzzling considering the fact that there has been strong interest from Chinese buyers. Indeed, Chinese purchases of homes and other real-estate assets have jumped up to 16% for the annual period ending in March 2014. This is more than triple of the Chinese real estate presence in the US market in 2007. Moreover, Chinese investors have been paying a lot of money for US properties. The median price paid by Chinese investors is around $500,000. This is more than double of the median price of all housing units sold in the United States.
Considering all these factors, one can’t help but feel gloomy about the short to mid-term prospects of the US housing market. Keep in mind that the US government’s purchases of mortgage bonds have driven mortgage rates to new lows. None of these apparently is helping. It will be a long time until the US housing market finds its legs across the board. Sure, there will be quite a number of hotspots but the overall picture leaves a lot of room for improvement.