The US real estate market has become more attractive than ever before! With the prices in other countries shooting up sky high, investors are interested in diversifying and seek more affordable markets for acquiring property in and the US surfaces as a reasonable choice.
Post 2008 Financial Crisis
The US was one of the hardest hit countries of the 2008 financial crisis. Real estate markets around the world suffered a blow and prices collapsed. The Moody’s Corporation documents this impact by the fall of the US commercial real estate index to 111 points from 185 points. With the passage of time, the real estate index has steadily recovered and has reached up to 163 points now. Homes prices however remain low and value lower than the 2008 peak.
Foreign Investors Interest
Local investors may hold a pessimistic outlook toward the real estate prices prevalent in the market but, foreign investors are largely attracted towards the offerings considering them bargain deals. The interest for foreign investors is built up in two ways, favorable conditions in the US real estate market and risky conditions in the real estate markets at home.
An insight into Foreign Investments
The slow recovery of the US real estate market from the 2008 crisis makes the foreign investments in acquiring commercial real estate property a lot less than usual. In 2007, the foreign investment amount had reached a peak of about $70 billion but after the 2008 crisis, it was recorded to be $10 billion only. Within a short span of time, a decrease of $60 billion is a definite cause of concern. In 2011, investments picked up pace and reached to $30 billion and in 2013, to 45 billion. Analysts are of the opinion that the upward trend will continue to pick up momentum in 2014.
Key Players in The Game
A number of foreigners have lined up in the race to acquire property deals in the US real estate market. Besides traditional players such as Abu Dhabi and Singapore, Norway, Canada and China have followed suit. The government of Norway is funding and partnering for US real estate projects using its extensive wealth fund. Canada investing about $14 billion is the single largest investor whereas China has invested about $43 billion. After 10 years of staying on the sideline, China has put up an investment larger than that made in the past decade, sufficient to speak volumes about the viewed potential during prevalent times and conditions.
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