I just came back form a two week trip in Europe - what an eye opener! My enthusiasm, about how cheap real estate in the US is, got elevated again. Fundamentally we are in a great period to buy - too bad a lot of Americans are cash strapped. The falling real estate prices coupled with the 6 year fall of the dollar against the Euro has created a huge discrepancy in what your money can buy on the two sides of the Atlantic.

So I was in Bulgaria, an eastern European country,  that recently became member of the European Union. A 30 year old 1000 sqf condo in the suburbs of Sofia (the capital of Bulgaria) in not so good of a condition costs $160,000 !!! To put this in perspective people in Bulgaria make 4-5 times less than Americans, infrastructure is still pretty poor and common areas around the buildings can not compare to the nicely maintained subdivisions/apartment complexes in the US. Also, have in mind that Bulgaria is one of the cheaper places in Europe - the same condo in Italy or Spain will cost 3-4 times more.

Now, for $160,000 in our local Atlanta market you can buy a decent 4/2.5 home around 2,500 sqf with a nice lot and in a nice subdivision. If you know how to bargain and where to buy from you can even buy it in a location that is not 50 miles from downtown:).

The difference is just mind boggling. We are talking about the US with all it has to offer being CHEAPER than countries with much lower living standards. From a pure investment perspective my hypothetical Atlanta house is also very attractive as the return on capital (not considering appreciation) if you rent it out is approaching 9% per year. For comparison the Sofia condo will yield 4-5% at best.

No wonder that wealthy Europeans have started investing in US residential real estate assets. We better be careful and not let the rest of the world buy us out one house at a time:).