The U.S. dollar has been weakening for the past two years and the depreciation could continue for the remainder of the year.  The dollar is weaker not only against the major foreign currencies of the Euro, Pound, and the Yen, but also against the Russian Ruble, Polish Zloty, South Korean Won, Thai Baht, South African Rand, Brazilian Real, and Mexican Peso.Why? One key reason is just an unwinding of the strength of the dollar that grew during the 2008/09 financial crisis.  Global financial panic always forces the dollar up as investors search for a safe, reliable haven.  Now with the financial market recovering quite strongly, the ‘panic’ impact on the dollar is no longer in play.  Another reason for the decline in the dollar is a result of the falling confidence that global investors are placing in the U.S. economy.  If you had cash to invest, where would you invest – in a country with strong growth prospects or in a country that could be losing competiveness with the rest of the world?A final important reason for the dollar decline is that the U.S. has been running up a sizeable trade deficit for quite some time.  Americans buy far more imported foreign products in relation to exporting U.S.-made products abroad.  To help rebalance this persistent trade deficit, the weakening U.S. dollar – in theory – is supposed to help Americans buy fewer foreign products and help sell more American products abroad.  John Deere, as an example, has better prospects to sell tractors to Brazil.  Also, many Americans may reconsider traveling abroad since the dollar doesn’t go as far in other countries (such as forking over $10 for a Big Mac meal in Rome, for instance, with ketchup costing extra).However, the weakening dollar could actually worsen the trade deficit if Americans keep buying foreign products, but now at a higher price.  Imported oil is one example where Americans are buying out of necessity even at higher prices.Whichever way one’s take on the desirability or undesirability of the falling dollar goes, one thing is clear as related to the dollar’s impact on real estate.  Right now U.S. real estate is cheap, from the perspective of a foreign buyer, which may mean more international purchases this year.  Below is a graph of U.S. property prices in different currencies over time.by Lawrence Yun, Chief Economist & Senior Vice President, ResearchMore questions we can help you, at County Properties, 24 years of brokerage experience, trust and a Member of the local Better Business Bureau!Want to know what your home is worth? Click here for a free market evaluation !New Pro-Property Search. We will setup a customized search for you by our professional REALTOR® Team. Sit back relax and shop at home! We will make changes to your Pro-Property Search any time you like, just let us know. Have fun!