By now, most of us have heard something about Brexit (British Exit). In a sentence, Britain voted to leave the European Union (EU) in a historic referendum June 23.
The effects of Brexit are being heard around the world. Britain has the world’s fifth-largest economy and is one of the United State’s biggest trading partners. After the vote, Britain’s pound dropped to a 30-year low prompting Americans to change vacation plans to visit Britain and take advantage of the low prices. Our stock market took a hit by dropping over 600 points. Oil dropped and gold rose after the vote. Currently, BBC News reports shares are taking a dramatic slide as fears over Brexit continue to grow.
It seems strange that a vote across the ocean could affect American housing prices but the global economy is very interconnected.
Last December, the Federal Reserve raised interest rates for the first time since the recession and was expected to make four more hikes this year. Last week, Fed officials voted to keep the mortgage rates on hold citing risks of a Brexit the main factor. With Brexit an actuality, mortgage rates are expected to fall to an ultra-low amount.
Lower mortgage rates generally mean higher home prices. The low rates enable homebuyers to afford a more expensive home with the same income. Home prices have been slowly moving upward from a national average of $134K in 2011 to $176K in March of this year (end of first quarter).
Many analysts conclude that Britain’s exit may cause an added demand for American real estate, both residential and commercial and especially in our major cities. Investors from around the world have been increasing their real estate holdings in the U.S. over the past few years gaining an insight and appreciation of realized profits.
These same investors are expected to now look at America’s real estate market as a good alternative to the London market. London has long been considered a haven for the global rich. It’s predicted major companies and banks in London will move their offices to Germany and France in the near future to avoid disruption to their European business which, in turn, will create instability and uncertainty.
Real estate investors don’t like the uncertainty over what new rules regarding foreign investment post-Brexit might be. This is a real concern that will further push investors to a more stable U.S. real estate market translating into U.S. residential and commercial property prices to rise.
Denver home prices were already predicted to rise 7.7% this year and that was before the Brexit vote. Denver (and surrounding areas) is one of those major cities investors may be headed to. The average home price in Colorado is $301,200. Home values have risen 12% over the past year in our state. Colorado already has a red-hot real estate market and predictions post-Brexit apparently will make it even hotter.
Competition with foreign investors in the Colorado market can lead to real estate issues, as current U.S. buyers and investors often make hasty real estate decisions and purchases in order to compete in a hot market. It is always best to consult with a Denver real estate attorney to ensure you are making the best financial real estate purchase. Gantenbein Law Firm can help with all Colorado real estate issues, both complex and simple- including: backing out of real estate contracts that were made in haste, real estate closing docs, real estate escrow issues, and all commercial real estate issues. Gantenbein Law Firm's Denver real estate attorneys are also available for last minute and emergency real estate issues. For a free consult of your case, call 303-618-2122.
Many real estate issues can have foreclosure, business, estate planning or tax implications. Gantenbein Law Firm also practices in these areas of law. For instance, Gantenbein Law Firm's Denver business attorneys will make sure you have the best commercial lease options, form the best LLC to protect you from liability or tax implications with your real estate purchases, and form the best, air-tight real estate contracts; their foreclosure lawyers will ensure clean title, loan modifications, or foreclosure defense of your real estate properties; their Denver tax attorneys will limit your capital gains from selling your real estate properties.; and their Denver estate planning, trusts and probate attorneys can make sure your real estate purchases are best protected for years to come, so that you can retire comfortably or pass down your wealth or real estate properties to your heirs.
Gantenbein Law Firm's comprehensive knowledge on how your real estate issues can have wide impact on their clients' finances, makes their lawyers among the top attorneys in the Denver, Colorado area. Their
For more information, call 303-618-2122 or visit www.gantenbeinlaw.com.