Many US investors have begun to reduce their exposure to overseas markets.
Fearing the global economic slowdown caused by credit and lending problems, property investors have begun to turn their attention back home. There are many markets that are somewhat resistant to recessions. One such market is college town rental property. Investors have found that property values in so called "college towns" tend to remain somewhat steady despite the national market's performance.
In the US, some investors have found that rental property in these locations enjoy a constant level of occupancy despite the vacancy problems that other markets face. This is due to the fact that universities will almost always be filled to capacity.
Students, faculty and other university staff tend to keep houses and apartments occupied. There is also a high probability that these renters will become buyers in the future. Retired alumni and young professionals usually flock to these locations, attracted by the atmosphere. Foreign investors have begun looking at these US markets as a way of making sure their investments maintain their value in times of uncertainty.
This trend is more prominent near large public universities because they do not usually have enough funding to provide adequate housing for all of the students. As a result, students are forced to find private housing, driving a robust rental market. While not all college markets are recession-proof, most seem to outperform their respective states in terms of value appreciation.
Markets outside of college towns like these, though, are also experiencing a break in the storm.
UK investors may only have to weather the storm for a little longer as the market appears to be leveling off. UK property fell by only 1.3% last month. The rental market also did better than expected, only falling 0.9%.
While losses could stretch into 2009, the market is already beginning to show signs of stabilising.
