The US property market has been battered by the economic storm that has hung over the UK. Back in 2006 America’s housing bubble finally crashed, wreaking havoc on the US economy. Although the market is still weak, there are positive signs of recovery and now could be the best time to invest in a property. Meanwhile the US rental market is flourishing, just as it is in the UK as people who cannot afford to buy are looking to rent. In fact many news channels such as USnews.com predict a rental market bubble.
US Property Market and Prices
A median forecast reported by the Reuters poll indicates a property market rise of just 1% this year and 2.5% in 2013 yet sales are still weak, largely thanks to tighter credit controls in a situation that almost mirrors what is happening in the UK. However the low property prices do mean that for anyone looking to move to the USA or make an investment, the US could be the place to be. Another housing crash is unlikely as the US economy, whilst definitely weakened and struggling is showing a few signs of a slow recovery.
According to figures by the National Association of Realtors, the median price in the Northeast of America is $239,900. In the Midwest the average price of a house is $157,600. In the South prices are around $159,400 and in the West average property prices are $233,300. So looking at those figures, the cheapest places to buy are in the Midwest states of America.
You can keep your eye on US property prices and the latest news with the Realtor website.
US Rental Market and Prices
To quote a recent article from TheStreet; “Despite the higher cost of entry into the market, many experts argue that investing in rental real estate is still a good idea considering the alternatives for investment available right now.”
The US rental market is booming with high rents and less vacancies and according to many sources including Reis Inc. this boom is set to continue. This is because young Americans are finding it harder to get a mortgage with tighter credit controls and the appeal of not being tied into such a heavy financial commitment – especially with what happened during the property crash – is luring them into rentals with the result that demand is high, driving up rental prices.
This is great news for investors who buy to let but not such good news for those who are looking for the best rental prices.
Earlier this month CNN Money published a list of 10 major metro areas which have seen the biggest rent increases. These included Florida, California, Massachusetts and New Jersey with an average rent increase of 5%. The median rent for all rentals was $1,350 a month in March 2012. This now makes it cheaper to buy a home than to rent.
Forbes have a report on the best and worst cities in the US for renters with New York taking first place as the most expensive city to rent and Tucson in Arizona being the cheapest.