1. Population Growth. A number of secondary markets are seeing a jump in population as people follow the jobs. This is particularly true in Texas, with rapid growth in Houston, Austin, and Dallas-Ft. Worth, fueled by the technology and energy sectors. Increased development and infrastructure improvements provide opportunities for investment.
2. Strong Economy. The U.S. economy is the most stable and open in the world, and attracts buyers from countries where the situation is much more volatile. Foreign investors can operate with relative freedom in the U.S.
3. Real Estate Prices Are Skyrocketing in other Countries. With the skyrocketing of real estate prices in places like Munich and Frankfurt top our list in 2020. Risk is also elevated in Toronto, Hong Kong, Paris, and Amsterdam. Zurich is a new addition to the bubble risk zone. Use the UBS interactive Global Real Estate Bubble Index to track and compare the risk of bubbles in 25 cities around the world over the last three years:
4. A Buyer’s Market. Prices are currently very low in U.S. commercial properties. They’re down 30% overall from their peak, and this makes U.S. commercial real estate the best bet for international investors, as well as an attractive option for domestic buyers. There can be no doubt that it’s a good time to invest in commercial real estate in the U.S. Its long-term stability and attractive inventory keep it at the forefront of international investment and continue to present opportunities that seem too good to pass up. If the projections turn out to be right, the Texas Triangle’s population will surge more than 19 percent during the 15-year span — from 18.14 million in 2015 to 21.65 million in 2030. To put that into perspective, the New York City, NY, metro area has about 20.18 million residents. In other words, if the Texas Triangle is treated as one humongous metropolis, rather than four separate metro areas tethered by highways and airways, it’s on track to eclipse the size of the Big Apple. Nonetheless, a 2008 report by urban planning professors and students at Texas A&M calls the Triangle “one of the most dynamic urban regions in the nation,” rivaling both New York and L.A. If the Triangle’s population grows as foreseen, the megaregion will become even more dynamic -- and crowded.
5. Renting is the new American Dream
For a long time, having one's own house was considered the epitome of the American dream. But that has changed: More and more Americans are choosing to live in a rented apartment of their own free will. For This gives investors promising prospects. "A growing number of residents no longer regards living for rent as a short-term phase, but chooses to rent the apartment completely
conscious, because this form of living allows a more flexible lifestyle than home ownership", CEO of the National Apartment Association (NAA) the interests of the owners of rental housing estates. According to the official statistics agency, the United States Census Bureau, the home ownership rate has been 69.1 to 64.2 percent (Q1 2018). The fact that more than every third American now lives in a rented apartment is connected to the subprime crisis. The generous granting of loans, even to households that do not actually own their own homes, is a major factor in the crisis.
2007/08 led to serious distortions in the US real estate market and ultimately to a on the global financial market crisis. The lenders reacted to this situation by Creditworthiness of the borrowers increased. "Higher credit standards require the purchase of owner-occupied
Residential real estate limits", the experts of the real estate consulting company CBRE hold in a current publication ("U.S. Multifamily Housing: A Primer for Offshore Investors")
Particularly large is according to their words the challenge for the so-called Millennials, i.e. those born after 1980, who are repayment of the high student loans customary in the USA are financially heavily burdened. But the trend towards renting is by no means only due to a lack of equity capital. Rather more and more US citizens are making a conscious decision to rent an apartment, even though they can easily could also afford their own house or condominium (called condominium in the USA). "Compared to previous generations, living for rent today enjoys a much higher
social acceptance", the CBRE experts note in their study. Many people, according to their reason, had recognized that they are much more flexible as residents of a rented apartment, if they
would have to move, for example, because of a change of workplace. In addition to this, there is also the USA to the major cities. Because there are relatively few condominiums there,
rental apartments are gaining in importance. The drivers: Millennials and baby boomers
Two main population groups are driving the demand for rental housing: the Millennials and the baby boomers. For those born in the late 20th century, it is not only the high costs of renting
of the studies, but also the changed life planning. "The Millennials are shifting the
central decisions in life, such as buying a house, and they are essential
more mobile than their parents were", US-American Today, men are on average 29.5 years old at their first marriage, women 27.4 years; this means that the Average age increased by two years compared to the situation ten years ago. However, demand for rental apartments is also coming from the baby boomers, i.e. those between 1945 and 1965 Born in 1945 and 1965, who have already retired or are gradually approaching retirement age approach. Many of them no longer want to deal with the costly maintenance of house and garden Instead, they are drawn to urban, well developed residential areas, from where they can restaurants, theaters and medical facilities. These older residents also appreciate the convenience associated with a rental apartment, as Robert Pinnegar of the National Apartment Association notes In the event of damage to the apartment they do not have to worry about repairing but you can simply entrust the property management with it. According to CBRE, this process of rethinking leads to the fact that in particular Demand for higher quality rental apartments is increasing. Rental apartments with excellent transport connections. "We have known the local market for decades and have already built many Projects successfully realized", The fact that more and more Americans can imagine living in rented accommodation opens up considerable opportunities for investors.
Opportunities - especially since the real estate economic figures also show that the rental housing market has leads other than a shadowy existence. "It is a very liquid sector with an annual
transaction volume of over 150 billion US dollars," states Jay Martha of TH Real Estate.
In the first quarter of 2018 alone, according to CBRE, residential developments in the USA changed hands for 35 billion US dollars. The consulting firm estimates the total market in the 62 largest conurbations of the country at 14.5 million residential units. The National Multifamily Housing Council (NMHC) estimates the total value of US rental housing at 3.3 trillion US dollar.
However, foreign investors have only begun to realize the potential associated with this realized. In 2017, only about four percent of the US multi-family housing stock was built in foreign ownership. This means that international investors miss out on attractive return opportunities. According to an analysis by CBRE, the rental housing market reached a very high level in the long-term (1992 to 2017), namely an average annual total return of 9.75 percent, which means that the return will be higher than other asset classes such as hotels (9.61 percent), retail real estate (9.44 percent) and office properties (8.38 percent).
6. Free of government intervention
In addition, the US housing market is largely free of government intervention is. While in Germany, the public sector is using the rent brake and other instruments regulating the housing market, comparable regulations in the USA are only found in some cities and also there only in certain cases. As a rule, the owner is therefore free to to charge a rent in line with market rates. The rental agreements usually run for one year; after twelve months, the tenant is entitled to
months the landlord can fix thus a new rent, which in upswing phases a substantial
rent increase potential means. Certainly, many Americans will continue to live in their own homes in the future. But all signs indicate that the rental housing market will continue to play an important role in the future. The demand after renting dwellings will remain high for a longer period, says anyhow fund manager Jay Martha from TH Real Estate. Investments in rented residential buildings are therefore a safe, low-volatility plant. Because the experts at CBRE are also convinced: "It is not to be expected that the home ownership rate will return to its former peak of 69 percent in the near future".