Is there any income from American real estate investment?

According to the statistics of National Association of Realtors (NAR), in 20 17, the total value of foreign buyers' purchases in the United States was153 billion US dollars, an increase of 49% compared with 1026 billion US dollars in the same period last year. The total amount of houses purchased by China people in the United States is as high as $31700 million, an increase of 18.6% over last year.

The unemployment rate has reached a nine-year low of 4.3%, the job market is picking up, and the dollar has been depreciating recently. Many investors think it is a good time to buy American assets at a low exchange rate.

As the most attractive real estate market for overseas investors, will the US property market continue to improve? Which places are most worth investing in?

1 current situation of American real estate market

(1) The market continues to recover and house prices continue to rise.

According to the custom of China people, the first question when buying a house is whether the house price will go up, and the answer is "yes".

The following figure shows a survey conducted by Zillow on more than 100 economists and real estate experts in the third quarter of this year, and predicts the US house price in 20 17-202 1 year.

Among them, the red dotted line is a pessimistic forecast, and it is believed that American house prices will rise by 6.7% in the next five years; The green dotted line is an optimistic forecast that house prices will rise by 28.8% in the next five years; The black dotted line between the two points to the forecast average, and it is believed that American house prices will rise by 18.4% in the next five years.

American house price forecast 20 17-202 1 (data source: Zillow, drawing: Pulsenomics)

Keeping Current Matters, another American business organization, also surveyed hundreds of economists, and they all agreed that American real estate will still show an upward trend in the next five years, and the cumulative increase will exceed 15%.

American housing prices have reached the highest point before the financial crisis in 2007, and some media reported that a bubble was brewing. Is there room for rising house prices in the United States?

The chart below shows the trend of the US house price index. The blue line is the nominal price over the years, and the red line is the house price adjusted according to the inflation level, excluding the price increase factor. It can be seen that the house price in 2007 was significantly higher than the level of 20 17, so the house price in the United States is still far from the high level before the crisis, and there is still room for growth in the future.

The median price of existing houses in the United States (source: NAR, US Department of Labor, drawing: WSJ)

So don't be fooled by superficial figures. For example, if inflation is included, a house worth $200,000 65,438+00 years ago is now worth $276,000.

(2) Buying a house is easier to get a loan.

Many investors want to know the loan situation in the local real estate market when buying a house.

The available credit index of American Mortgage Bankers Association (MBA) is an authoritative indicator to measure the difficulty of obtaining mortgage loans. The higher the index, the easier it is to get loans, and vice versa.

20 17 August, the index has reached the highest value in eight years 179, and it is in the period when it is the easiest to obtain mortgage loans. Many large financial institutions are more willing to provide mortgage loans to borrowers.

American Monthly Available Loan Index (Source: American Mortgage Bankers Association MBA)

Of course, it is also a big plus for foreign buyers. At present, some countries restrict foreigners to borrow money to buy houses, while the United States has opened the door to mortgage loans, which is undoubtedly more conducive to investors' financing.

(3) mortgage interest rate

In addition to rising house prices and easy access to loans, another important issue is monthly payment. The current mortgage interest rate in the United States is shown in the following table. Even the longest 30-year fixed interest rate is only 3.75%. You know, the current domestic interest rate is 4.9%, which is still the lowest interest rate in the past decade. It can be seen that the current mortgage interest rate in the United States is very low.

Due to inflation and the employment of non-agricultural population is less than expected, the probability of the Fed raising interest rates in September this year has dropped to zero, and the probability of raising interest rates at the end of the year has also dropped significantly. Therefore, it is more cost-effective to buy a house through a loan in the United States.

(4) housing transactions are active and liquidity is enhanced.

Whether the property is easy to sell and how mobile it is is also one of the concerns of investors.

At present, houses in the United States are only sold for 37 days, which is the best level in the past five years. Popular cities such as Seattle, Boston and Denver can even sell their houses within 10 days.

REDFIN housing market at the time of sale

For assets with poor liquidity such as real estate, this degree of liquidity is quite rare. If your property is value-added, the better the liquidity, the more you can ensure that the house can be resold in the shortest time.

(5) Housing inventory is tight.

House prices in the United States rose rapidly, and inventories hit a 30-year low. In the second quarter of this year, unsold inventory only accounted for 65,438+0.9% of the total housing. At the same time of strong demand in the property market, the number of new housing starts in the United States is only 849,000 units per year, far lower than the level of 6,543,800+0,360 units before the financial crisis in 2007.

The decrease of newly started houses is also related to the shortage of construction workers and the decrease of construction employees. At present, there are only 767,000 employees in the residential construction industry in the United States, which is 20% lower than that of a decade ago.

According to the data released by NAR, the real estate sales data in June was 5.52 million, down 1.8% from May. Lawrence Yun, chief economist of NAR, said that the shortage of housing supply "added fuel to the fire" for the rise in housing prices.

The tight inventory in the United States will remain the norm and will continue to push up housing prices. Sam Khater, deputy chief economist of CoreLogic, believes that the main reason for the continuous rise in housing prices is limited supply and strong demand.

(6) The construction cost continues to rise, further pushing up the house price.

In 20 16, the United States encountered a shortage of construction workers. According to the data of NAHB, there are about 200,000 jobs in the construction industry at present, and the shortage of construction workers will continue.

In this case, builders have to pay higher wages to builders, which increases labor costs. It is conceivable that the resulting cost increase will be passed on to buyers or investors.

You may think of Trump's strict immigration policy. Although the political achievements are average, the anti-immigration attitude is firm. Two days ago, he wanted to repeal the Dama Act. This is only one aspect, which will further lead to a large shortage of construction workers in the short term, increase housing construction costs and indirectly raise housing prices.

(7) Millennials will become home owners, and the home ownership rate will increase.

Young people in the United States-"millennials" (born in 1982-2000) will become a force to be reckoned with in the real estate market in 20 17 years. More first-time buyers will also promote the prosperity of the real estate market and push up housing prices.

On the one hand, the proportion of this generation living with their parents has reached the highest level of 40% in 75 years; On the other hand, older people among them have gradually reached the age of 32-the average age of buying a house for the first time in the United States.

Although they live with their parents in a high proportion, which inhibits the demand for housing in a short time, it can also generate a large number of first-time housing demand in a short time. Because "millennials" advocate independence and freedom, living with their parents in the short term is only a transition, and eventually they will buy a house and live independently.

According to NAR statistics, there are 654.38+05 million young people living with their parents in the United States, compared with 654.38+00 million ten years ago. In 20 16 years, 6 1% of the first-time buyers are young people under the age of 35, and the potential buyers of "millennials" will gradually erupt after 20 17 years.

Two indexes that can be paid attention to when investing in American real estate

(1) Population growth and net inflow

First of all, people buy houses, so "people" is the most critical factor. How a local population grows, whether there is a net inflow of population, and whether there are continuous and high-quality foreign and foreign immigrants are all worthy of attention.

If the population of a place continues to move out and no foreign population is willing to enter, then the value of local real estate investment will be greatly reduced.

Take Detroit as an example. Since 1975, the local population has been declining for many years. The World Population Watch Network predicts that the local population decline will continue until 2020.

Population of Detroit Metropolitan Area (Source: World Population Review)

On the contrary, in Toronto, Sydney, Los Angeles and other cities with a net inflow of transnational immigrants, housing has become just the need of new immigrants. For foreigners who have nothing in the local area, the first thing to do after arrival is to find a place to live, so it is inevitable that house prices will rise.

This standard also applies to China. At present, many young people in third-and fourth-tier cities flock to provincial capitals and first-and second-tier cities, which puts pressure on housing prices in third-and fourth-tier cities. If you plan to invest in real estate in these cities, please be careful.

(2) Unemployment rate

If you have enough people, you must have corresponding job opportunities, otherwise you can't even support yourself, let alone have no money to buy a house. Low unemployment rate has also become a favorable factor for real estate investment.

The following figure shows the research on the correlation between housing prices and unemployment rate in the United States by MarketOracle, a market forecasting agency. The black line represents house prices and the red line is unemployment rate. As mentioned at the beginning, the current unemployment rate in the United States is 4.3%, the lowest point in recent years, and almost full employment has been achieved.

House prices in the United States are inversely proportional to the unemployment rate (Source: MarketOracle)

It can be seen that there is a significant negative correlation between housing prices and unemployment rate in the United States. The decline of unemployment rate will keep house prices stable and gradually rise.

In addition to the national unemployment rate, you can also find the unemployment rates of States, cities, districts and communities in the United States. As the example in the following table shows, the unemployment rate in Queens, new york is low, so you can find a better local neighborhood and choose to buy real estate.

Investigating the future trend of unemployment rate can predict the trend of house prices in advance to some extent.

(3) Exchange rate changes

As mentioned earlier, the US dollar has stepped out of the weak market this year, which is related to the Fed's slight interest rate hike and Trump's "weak dollar" expectation. He hopes to promote American export trade.

Since the beginning of this year, the US dollar has fallen by 6.5% against RMB, and now it has fallen to around 6.48. It is also a discount for us to buy assets when the exchange rate of the US dollar is low. The same is true of the pound, which is currently at a historical low.

(4) Annual rental rate of return

The annual rental return rate is obtained by dividing the annual rental net income by the total house price (or the total purchase cost). The gross rental rate of foreign houses should be around 6%-7%, because the holding cost may be reduced by about 2%.

When investing in overseas real estate, only a few investors are used for their own careers. Even if they live in their own houses, some people will not move in until their children grow up and go to middle school or university. Therefore, renting a house is an inevitable choice.

Many westerners prefer renting to buying, which makes many foreign properties available for rent at higher prices.

Generally speaking, the rental return rate can reach 5%, even if the income is reasonable, it is best not to be lower than 4%. Of course, the more the better. There are a lot of relevant data and analysis in gold 1849 and zgtrend of WeChat official account. Please read back the previous article.

(5) Public safety and crime rate

When buying a house in America, you have to pay attention to the crime rate in your community. No matter which city you are in, there may be areas with poor public security, and these places should be avoided as much as possible.

There are many similar websites in America, such as Familywatchdog, Trulia, CrimeReports and so on. , you can query the security and crime rate of the community where the house address is located.

Take a villa in Jamaican community in Queens, new york as an example. The address is 81-15 Warham pl Jamaica Estates, NY 1 1432. The picture below shows the security situation of this address on Trulia website. Green stands for safety, and red stands for worrying safety.

Choosing a house in a good security area can also guarantee the appreciation of the purchased property.

(6) school districts

China people are most concerned about the quality of the school district where the house is located and the comprehensive situation of the community. The school district information of American real estate is very clear, and there is a special website (such as GreatSchools) to query, where you can see the ethnic composition of students, students' test scores and many other information.

Take the villa in new york as an example. Its school district is of high quality. The assigned primary school and junior high school are 10 (full marks), and the students are mainly Asian and Hispanic.

The primary school in the school district, Ps 13 1 abigail adams, 10, has a perfect score, which is far ahead of the national average in the national score evaluation.

The students in primary schools are mostly Asian and Latino. Schools with Asians will definitely get high marks and good grades.

(7) community

American community is an important existence, and community culture is prevalent. Therefore, the population, class, environment and other conditions of the community directly affect their own quality of life, the potential of future house price appreciation and so on.

The villa in Queens, new york above is a typical community above the middle class, with multi-ethnic residents and a high proportion of college students. The average annual income of community families is significantly higher than that of Queens, new york and the United States, with a high proportion of owners and superior living environment.

To sum up, with the continuous influx of population, reasonable local unemployment rate, affordable housing, easy resale, good public security, and finding a relatively low exchange rate can basically avoid irrational overseas housing purchase.

3 American real estate opportunities and the city of hell

Real estate investment will eventually be implemented in specific cities. Let's talk about the generally optimistic urban real estate opportunities for your reference.

(1) American City of Real Estate Opportunities: Most of the three emerging urban agglomerations.

At present, the cities suitable for real estate investment in the United States include Seattle, Portland, Dallas, Austin, Denver, Raleigh, Tampa, Charlotte, Orlando and Jacksonville.

Seattle and Portland are the undisputed twins of the American real estate market in the past year. At the same time, the supply and demand of these two popular cities are still unbalanced, and the performance in the coming year will still far exceed the national average.

Case Schiller's house price index of 20 cities

The performance of three emerging metropolitan areas in the United States will still be eye-catching, including Texas, Florida and North Carolina.

Three emerging metropolitan areas in the United States (Source: Overseas Nuggets 65438+1October 12 article "Where are the biggest investment opportunities in the United States in the future? 》)

Dallas is the largest city in Texas, a well-deserved "new first-tier city" in the United States, and the fastest-growing city among big cities, ranking third in the 20-city house price index. In addition, Austin, the capital of Texas, is considered as one of the most potential cities because of the large net inflow of young people and the entry of new industries.

On the whole, Texas has the headquarters of the second largest Fortune 500 companies in the United States (54), and it is also the state with the largest net population inflow, with strong economic development.

Raleigh and Charlotte, located in North Carolina, are called "Silicon Valley in the Eastern United States". Many high-tech industries have emerged in urban agglomerations, which is also a promising field for future development.

Tampa, Orlando and Jacksonville, Florida are also listed as the best cities for real estate investment in the next few years by many institutions, which is consistent with the judgment of gold 1849 in 201610 June 12. The future investment opportunities of these emerging metropolitan areas deserve everyone's attention.

In addition, Denver, the capital of Colorado, also performed well, ranking fourth in this year's price increase list. Thanks to convenient air routes, entrepreneurial atmosphere, rapidly developing culture and tourism industry, the future is also worthy of attention.

(2) The hell city of American real estate market.

In terms of cities that American real estate investment needs to avoid, three cities that are often mentioned are also selected for everyone to judge: Chicago, Pittsburgh and Detroit.

According to the survey of American website GOBankingRates.com, Chicago is not optimistic, because its employment growth rate is only 1.3%, and its population growth rate has also dropped by 0. 1 1%. According to Keith Schiller's statistics in the above table, the price increase in Chicago in June was not large, only 3.2%, far below the national average of 5.8%.

Pittsburgh and Detroit are both related to the decline of traditional industries and the pain of urban transformation. Among them, although the rental return rate of Detroit is high, it still belongs to the paradise of adventurers because its housing prices are not well supported by economic fundamentals. In the above-mentioned 20-city index, although Detroit's house price has increased by 7.6%, it is also related to its own low house price.

If you want to invest in real estate in these cities, you need to do due diligence first.

Source: American Association of Realtors, American Housing Construction Association, Zillow, Redfin, Pulsenomics, Core Logic, American Mortgage Bankers Association, California Association of Realtors, Florida Association of Realtors, Real Estate Economic Watch, Housing Connection, Mortgage Report, Realtors, US Census Bureau, St. Louis Federal Reserve, new york Accounting Firm, MLS, Zillow, Douglas Elliman, Trulia, etc.

Question and answer session

(1) Which is more suitable for investment, new york or Texas?

(2) Which city in the United States has the highest income from investing in real estate?

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