Monday, April 6, 2009
Across the pond: Green shoots, or pond scum?
Last year the Cape Coral area of Florida had the highest foreclosure rate in the country. But recently a curious thing has been happening in this blighted former boomtown: Buyers are swooping in. First-time home-owners are suddenly entering bidding wars with real estate speculators from as far away as Spain and Germany. Sales in February outpaced those at the peak of the boom, with some houses getting more than 50 offers and selling above their asking price. So what's going on? In all of these markets, banks are dumping foreclosed properties, attracting cash-rich speculators looking for cut-rate bargains. Government incentives of up to $8,000 in tax credits for first-time buyers and low mortgage rates engineered by the Federal Reserve are luring buyers who otherwise would be sitting out.