To successfully invest in real estate abroad, it is important to understand what economic changes are taking place in the country you are interested in, as well as what trends may manifest themselves in the coming years. This is especially true in the United States due to the unique dynamism of the local economy.
For a clear understanding of the situation, the investor has to delve into the state of various areas of the US life, from the policies of the federal government and local authorities to the daily choices that the average American makes in everyday life.
Now there are several favorable prerequisites for the development of the economy: they should be carefully considered by those who are just thinking about investing in real estate, and those who already own an investment portfolio and want to increase their income or simply diversify it.
During the years of crises, the United States economy has developed a remarkable ability to recover from recessions at lightning speed and quickly turn difficulties into new opportunities. Thanks to this ability, as well as the transparency of the procedures, many investors decide to invest in real estate in the US.
The typical American dynamism has not gone away in the twenty-first century: one of the amazing examples was the revival of Detroit. The city, which declared bankruptcy in 2013, is thriving again today, and the headquarters of many Fortune 500 and Fortune 1000 companies that are now located on its territory are proof of this.
The case of Detroit shows the tremendous resilience typical of the American economy. It is enough to recall that during the crisis, about 40% of street lights did not work, many streets were completely deprived of lighting. However, in 2014, the city officially ceased to be considered bankrupt due to a thorough reconstruction program. And in just one year, Detroit became the first American metropolis to have public LED lighting.
Extensive renovation work has been carried out in the metropolis, aimed at making it more attractive for both large companies and individual investors interested in American real estate.
Today you will not recognize the former city: the modernized financial center and completely renovated residential areas have made it extremely attractive for real estate investment.
The President Biden made it clear that vaccination is the top priority of the initial stage of his policy. Of course, there was no doubt about his intentions, but the result is impressive: more than 90 million Americans have already received at least one dose of the vaccine. This is slightly less than a third of the country's population.
In a speech delivered on March 2 at the White House, the president gave the exact time frame for the next stage: by the end of May, the United States will have enough doses to vaccinate the entire adult population.
All this data, of course, seriously affected the international markets in general and potential investors in real estate in particular. If their plans come to effect (which is likely), a domino effect will begin: the investments made will increase the attractiveness of the market, so new investments will follow. And all of this together will further strengthen the US global presence. In addition, by emerging from the pandemic earlier than many other countries, the United States will be the first to restart its economy and return to normal life.
Vaccination is proceeding at an extremely rapid pace: more than 2 million people are being vaccinated every day, and the percentage of those vaccinated is growing rapidly. In some states, the lifting of restrictions has already begun. In Texas, the requirement to wear masks is removed, and in California, more and more counties are returning to normal life at an accelerated pace. Movie theaters are already opening in New York, and theaters are scheduled to open in April, which will be a positive signal for the relaunch of the entertainment industry.
In addition to the fight against the pandemic, the Biden administration has also decided on who will receive the main political and economic incentives to compensate for the consequences of the sanitary crisis in the economy. Their main recipient from the very beginning of the new presidential mandate was the average American citizen.
Following the ideas of the great economic and political figures of America, in the style of Roosevelt's "New Deal", Biden seeks to directly help Americans in various areas, from fighting unemployment to directly raising wages. It is estimated that three-quarters of the US population will actually receive aid. The focus is on the needs and difficulties of the middle class, which Biden himself calls "the foundation of democracy".
The President's approved stimulus plan calls for $1.9 trillion in payments under the policy. It is assumed that $1,400 must be paid per person with an income of up to $75,000 per year. Since the beginning of the pandemic, this is the third payment from the state. For the first time, at the beginning of the pandemic, almost all American citizens were given $1,200, then in December 2020, another $600 was added.
What does all this have to do with US real estate investment? Economic assistance to an individual American will directly affect the regularity of rent payments. The house is still a major asset.
The new administration is also taking measures to combat unemployment. As a result, 379 thousand Americans were hired in February. This is a great sign in terms of economic recovery. And the fact that a significant portion of these new jobs, 355,000, belong to the field of recreation and hospitality, suggests that American entrepreneurs are preparing to return to normal work in the near future.
There is a sense of tension in the global markets right now: professionals are trying to catch the slightest signals coming from America. The statements and actions taken by the President of the United States portend changes in the financial market. It is possible that in the coming months, the dollar will grow against other world currencies.
In conclusion, let's look at how the residential real estate market in the United States is currently behaving, specifically in Florida. This is one of the most attractive places for foreign investment in real estate.
According to the latest data from FloridaRealtors®, in January 2021, sales increased by 18% compared to January 2020. In addition, it now takes an average of 19 days less to sell a property than last year (-21.6%), which is partly due to a decrease in the number of available properties. The number of properties for sale (active ads) has already halved, and there is a rush among buyers. If the current trend continues, the entire property could be sold off in just over a month and a half.
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