Why Buy Real Estate in the United States?
Excerpted from Various International Sources
November 27, 2007
 For many people around the world, investing in American property makes good financial sense, and can be a more secure investment than buying property in their own country. "Investors and second-home buyers are looking to the United States from parts of Asia, Latin America and other regions where the United States is viewed as a relatively stable market," experts are saying. (Not indicated on this chart is that one of the largest groups investing in property in America are from Australia. Australians like property ownership and in addition to buying in their own country, they are buying in America.)
  Now is the time to buy US real estate, home prices have temporarily dropped and many currencies are strong against the U.S. dollar. Also, even though many buyers from other shores buy cash, relatively low mortgage rates have turned houses and other real property into the investment of choice for a growing number of people. Some see real estate as a better way to earn money than stocks or other securities, while others are interested in using the properties themselves.
And of course with some foreign currencies, and certainly the euro, running at record highs against the dollar (a situation that most experts expect to continue for at least the near and medium term), the prospect of investing in American real estate has never been brighter. Considering currency exchange rates and real estate prices flattening in some areas of America, people from the EU, for example, purchase at a 2002 price point. That is very, very attractive.
Christiane Feldhaus, president of Washington, D.C.-based FIABCI-USA, the U.S. chapter of the International Real Estate Association, said, "One of the main reasons for investing abroad is asset diversification, and the trend now is toward a global real estate portfolio in part because of the opportunities that exist," she says. "The U.S. market is gaining strength, prices in major markets compare favorably to other international cities and the dollar is cheap." In our increasingly global economy, from an EU perspective, an informed and rational investor should view opportunities to invest in the U.S. as a ready alternative to European real estate markets.
While most national governments throughout the EU impose barriers to foreign ownership of land, in the United States few restrictions exist on purchase, ownership, development or sale of real estate by non-residents.
Apart from provisions of the U.S. Tax Code intended to ensure that tax payments from profitable sales are collected ( at low rates, applicable only to any gain and collected only after sale) U.S. laws impose almost no limitations on ownership or disposition of real estate by foreigners.
Compared to other countries, much of the U.S. is relatively undeveloped with lower population density, although some major cities (such as San Francisco and New York) compare with prime locations in Europe.
Resale prices, available uses and expectations for future growth, of course, are controlled by local factors as they are anywhere in the world. Generally, though, almost any kind of desirable real estate—single family detatched homes, condominiums, apartment buildings (i.e. four-plexes, eight-plexes), commercial and industrial buildings, waterfront and coastal property, farms and ranches—is generally much more available and, at this time, more affordable than comparable real estate in, for example, Germany and the UK. |
