You can’t open a newspaper these days without reading about the U.S. economy.  Chances are, you’ll also read about the U.S. housing market.

It’s no secret that the U.S. real estate market is in trouble.

So for foreign investors with money to spend, when is the right time to begin speculating on condos, land, and vacation properties?

Here is a story for you.

My father owns two vacant pieces of land in Driggs, Idaho that he purchased back in 1997.

Aaaaah, 1997.  American only wishes it were still 1997.  Bill Clinton was in office, the economy was strong, interest rates were moderate, unemployment was low and getting even lower, and the U.S. dollar was worth about $1.40 Canadian funds.

My, how times have changed.

Driggs is a small city in Idaho that is home to some of the best skiing in the Rocky Mountains.  While this area isn’t exactly a secret, it’s not nearly as well known as Aspen, Colorado or Park City, Utah.  Aspen took off in the 1980’s, and Park City took off in the 1990’s when they were awarded the 2002 Olympics.  Driggs, on the other hand, has still yet to gain national or international appeal.

But, the wheels are in motion.  Or at least they WERE…

My father has been contemplating building a house on one of the pieces of land for several years now.  The year-round population of Driggs hasn’t changed all that much (1,100 people in 2000 versus 1,265 people in 2006), but the number of vacation homes has exploded!

The problem my father encountered was that no builder would commit to building the house for less than $400 per square foot, which is just far too much for any house, especially one that will be used only a few weeks a year.  So my father called a local real estate agent in Driggs to talk shop, and this real estate agent said something that completely sums up what the U.S. is going through right now:

“The U.S. housing market is on it’s knees.”

I don’t know how to get that point across any stronger.

He went on to say that houses on the Driggs golf course that were listed at $1,200,000 US in the summer of 2006 are now listed for HALF that price!  Imagine that!  Can you ever imagine a condo in Toronto listed at $329,900 in 2006 and then subsequently selling for $169,900 in the fall of 2007?

But here’s the rub: I said “subsequently SELLING,” which is not the case with these houses in Driggs.  Now priced at $600,000, these gorgeous houses continue to sit, unsold, on the market.  Builders are walking away from projects that are 70% complete.

Nobody is buying.  Period.

However, go around the other side of the Teton Mountains to Jackson Hole, Wyoming, and the opposite is true.  The real estate in Jackson Hole, which is a “name” and a far more well-known area than Driggs, is absolutely booming!  Prices continue to drive upwards, and both residents and vacationers continue to pump money into the local real estate market.

So is this a good sign for the U.S. real estate market?

I don’t think so.  With this kind of parity between two areas of the country, nay, two areas only 25 miles apart, wouldn’t this scare anybody holding any real estate in this country?  That’s like saying that the Toronto real estate market is booming, but people are walking away from their houses in Oakville because they aren’t selling.

How can this be?

Wow, is the U.S. ever in trouble!

So that begs the question: when do investors rush in and buy up all this “worthless” real estate.

As much as I’d like to put my money where my mouth is, I think I might just stay at the Best Western next time I’m skiing in Driggs.  I’m not Alan Greenspan, and I’m not the Amazing Kreskin either.  The U.S. real estate market is such a mess; I want to be as far away from it as possible…