According to numbers from FRED Economic Data, obtained from the US Census Bureau and the US Department of Housing and Urban Development, the median sales price of residences in the United States was $507,800 in the first quarter of 2022, compared to $418,600 in the same quarter of the previous year. That is, more than a 21% increase. It also represents an increase of 35% compared to the same quarter of 2019, prior to the pandemic ($375,500) and 97% compared to the first quarter of 2009 ($257,000).
This upward trend applies to different types of properties. For example, in the condominium market – which had shrunk at the beginning of the pandemic, especially due to concerns about living in close proximity to other people – demand has increased significantly again, showing a change in cycle. According to Redfin, the rate of decline in condo inventory is now outpacing that of single-family homes: There were 28% fewer condos for sale in February 2022 compared to February 2021, and 14% for single-family homes. Consequently, the median condo sale price hit a record high of $319,000 in February. Of the large cities audited, Nashville had the largest price increase in a year, at 49%.
Houses also saw a significant increase in prices in the 20 largest cities in the North American country, according to Standard and Poor’s. Some increases in the most popular investment cities for Argentines were 32.41% in Phoenix, 24.41% in Tampa, 23.66% in Dallas, 22.23% in Miami, 19.12% in Los Angeles, 18.48% in Atlanta, and 17.86% in New York. York.
Real estate market: How will the rise in property prices continue in the US?
Today we think that consumers in the United States are much better positioned in the event of a possible slowdown in the country’s economy, than in previous economic cycles. This said at the level of the global economy, which, segregated by sectors, privileges Real Estate activity would be one of the least affected and most protected activities in a possible scenario of lower economic growth than expected. This conclusion is based on the scarce construction of houses since the 2008 crisis that the country experienced, its demand not only remained firm but also increased, the impulse and support of the State and Federal Governments to the Real Estate industry, the incentives taxes and urban decentralization as a result of the experiences of the pandemic, which is even more accentuated, if we regionalize as technically it should be done, in the states of the central east and southeast of the country (such as Florida, Georgia, the Carolinas and even Virginia; as well such as States like New York with specific locations 1 or 2 hours from Manhattan).
To think today that today’s ascending construction cycle lasts for many years, is not an expression of optimism or even a forecast, but rather it is a projection with a high degree of certainty on solid foundations that are based on data from reality and empirical experience.
Thus, for example, the Federal National Mortgage Association predicts that house prices will grow 10.8% in 2022, more than double the average annual home appreciation since 1987 (4.6%). On the other hand, Zillow predicts a rise of 14.9%, while CoreLogic bets on 5%, and the Mortgage Bankers Association on 4.8%. With more or less optimism, everyone agrees that prices will continue to rise in the remainder of 2022.
California Mortgage Bank COO Tabitha Mazzara said it would be a mistake to wait for prices to suddenly drop to past values, and if you’re ready to buy, you shouldn’t wait because the Federal Reserve Board has promised a boost in interest rates and because although values increase to a lesser extent, there will be no precipitous drop in prices.
The 5 reasons that value properties in the US
1-Taking the answer to this question to a minimum expression and maximum synthesis, we would say that the very small supply of finished properties for sale added to the wave of purchases by investors (retained aggregate demand) plus an insufficient level of activity of the construction–increasing since 2008 but still far from balancing current and future orders–, causes this phenomenon that, far from being transitory, we see that it is here to stay.
two-Additionally, it is good not to forget that property prices are highly sensitive to unexpected increases in demand.
3-We also see that there is an increase in investments in short-term rental properties, surpassing the number of buyers for residential purposes. This trend grows in part due to the tax benefits that investors receive for profitable purposes, an incentive that resident owners do not have.
4-The economy plays a very important role, as is known, when it is strong, in a cycle of expansion, people feel secure in their jobs and in their ability to meet mortgage debt, the level of unemployment is low, and prices of homes tend to rise. According to the US Bureau of Labor Statistics, the unemployment rate in June 2022 was 3.6%, compared to 6% in April of the previous year, and 14.7% in April 2020, when the pandemic hit. The 3.6% of June 2022 is only 0.1% above the lowest value of unemployment since May 2002.
5-Stability and economic security is equal to long-term projection capacity.
How can Argentines take advantage of this investment opportunity?
Investing in properties in the United States, placing your savings in tangible assets in the real economy in a country economically and legally with high levels of security.
Analyzing what type of property is the most convenient: house, apartment, condo-hotel, townhome, among others. Although each investment has its own characteristics with well-differentiated benefits, any of the options mentioned will always be a better alternative than keeping the savings depreciating.
Investing in a property directly or through a management company, to obtain a secure monthly income in dollars. For example, condo-hotels are preferred by Argentines because you can have the deed for a condominium from approximately $50,000, and with the ease of a safe and solvent management company with experience in the business that manages it as a hotel.
For capital that comes from abroad, regardless of the country, investing in the USA allows, in addition to generating a significant benefit, to ensure that this return in dollars can be protected as a solid value for asset growth on the indisputable basis that additionally, If the investor comes from an economy with a weak currency, receiving dollars always means economic tranquility that will be enhanced.
Specialist in real estate developments based in Miami, and operating in different states of the United States.
Source: Ambito
