The good news for expats and property investors with homes in the United States is rents are rising faster than house prices.
Although many investors rely on the holiday home market in the sunshine state of Florida and the gambling capital of Las Vegas, many have jumped in to pick up ordinary homes at bargain basement prices.
The slump knocked around off home prices across the states, and gave an opportunity for investors to step in and make hay as cash buyers.
In some cases, like the bankrupt city of Detroit, the investment has backfired, but encouraging developments across the housing market during recent months have made the investment choice seem worthwhile for many.
The median asking rent – the most likely rent paid by a renter – across the country dropped 0.7% in the last quarter of 2013 to $716 a month, but was almost 5% higher than 12 months earlier, according to the US Census Bureau’s Housing Vacancy Survey.
Regionally, the rent varies – from $599 a month in the Midwest to $911 in the West.
The vacancy rate – or void times when rental homes have no tenants has also dropped into single figures, while the price-to-rent ratio has fallen steadily since 2008.
This signals rents are aligning with house prices and tenant incomes to become more affordable while still giving investors a good yield.
The Standard & Poor’s/Case-Shiller house price index jumped 13.88% in the year to the end of November 2013 – the largest year-on-year price rise since the credit crisis and March 2006.
For the three months ending November 2013, prices were up 2.87%.
Home values at 7 year high
Home values increased in all the 20 US major cities, with the highest in Phoenix, Arizona, where prices rose by more than 27%. Close behind were San Francisco, California, (23%), Las Vegas, Nevada, (21%), San Diego, California, and Atlanta, Georgia (Both 18%).
House sales were generally up across the country, by more than 16%, which is the equivalent of around 480,000 homes. This followed a six-year decline until 2012, when house sales were up a fifth to 368,000 compared with 2011.
“Following an unexpected jump, construction confidence has levelled out and is steady,” said National Association of Housebuilders’ chairman Rick Judson. “The markets in many cities are improving and this bodes well for future home sales.”
Repossessions were down by around a third, to around 750,000 homes year-on-year, falling to 2006 levels. The state with the highest level of foreclosures was Florida.