Les Echos – Edition(#2) July 19, 2019
From multi-million dollar condos at New York to suburban houses of less than $100,000, the American dream is within reach for all budgets and spreading through 4 time zones. Already more than 300,000 Frenchies have settled down on the other side of the Atlantic, the United States is welcoming the second largest contingent of French people from abroad behind Switzerland.
Since the subprime cataclysm in 2008, American real estate has recovered to return to its pre-crisis level, thanks to vigorous economic growth.
“However, it is difficult to estimate the market on the scale of the country” warned François Gagnon, president of the real estate group ERA for France and Europe “it must be evaluated city by city”.
Les prices soar on the west coast
In the East coast, between Boston and Atlanta, the median transaction price fluctuates around $220k in medium-sized cities and climbs in certain large cities: $420k in the Washington region, $460k in Boston and $400k at New York.
That is said, more than in other cities there are a multitude of markets in New York. A two beds condo in Manhattan can sell for over a million dollars when you can buy a condo of several hundred square feet in Brooklyn for the same price. What should also be looked at carefully are the maintenance fees. In large cities, they are generally higher than in France.
In the interior of the country, prices fall below the median of transactions which is around $250k.
On the other hand the prices soar on the west coast. San Francisco attracts large numbers of foreigners each year who swell the ranks of Silicon Valley. In the country’s most expensive city, the median transaction price flirts with the million €uros when it rises to more than $1.2 million in San Jose. In Los Angeles, properties are trading around $570k.
Florida State is booming
But in recent year the main real estate market is undoubtedly Miami that is experiencing an unprecedented boom. Since 2012 and the end of the crisis, prices have been 20% higher than before 2008 and have continued to rise. And international buyers come more and more. According to the NAR (National Association of Realtors), nearly 19% of all transactions in 2018 were carried out with foreigners.
“In the Miami region, we are between 2,000 and 10,000 €uros/m² and an average of 6,000 €uros/m² for areas greater than 150 m²” explains an agent at Sotheby’s Realty in Miami. The city is building lustily, which keeps prices at reasonable thresholds, even if the luxury market takes off in the city that is so close to the Caribbean.
The lucrative rental investment
“It is an interesting market for investors with very high rental profitability” explains this agent. The absence of a state tax in Florida also favors this growth.
A couple from south of France has just purchased a house in the island of Miami bay with 3 bedrooms, 4 bathrooms, a jacuzzi and a swimming pool for $550k. “It was rented in less than a week for rent of $3,700 a month” says the real estate agent.
The other popular formula is the “condo hotel”, where you acquire a room in one of the huge buildings on the seafront managed by a hotel with a 2.5% profitability. “It is ideal for those looking for a pied-à-terre and staying between 30 and 60 days a year” he specifies.
Source : Lesechos.fr