U.S. house prices in comparison to the rest of the world
Is there any upside potential left for investors and landlords?
Note to reader: Toggle down to the bottom sortable table to look at which cities in the United States still offer investors with some sound pricing opportunities. I get asked this often. Hint: The largest SFR REITs are concentrating in those areas.
National U.S. House price to household income multiples over time have been creeping higher, but are still lower than elsewhere around the world.
Note: Click on each header to sort (ranked by price to income multiple)
Despite what the MSM and alt-media are proclaiming, house prices in the United States are still a relative bargain when compared to the rest of the world. Although house price to income multiples have been creeping up since the bottom of the housing bust that resulted from the Great Recession, the data are still low when compared to the other developed nations.
The SFR institutional money is fully aware of these results, and that’s why they continue to add to their SFR portfolios.
As for my analysis, we currently have a bifurcated global housing market; American house prices, capitalization rates, and rent yields are still superior to the other Western nations. Until these values converge in any meaningful way, I look for U.S. house prices to remain firm. I cannot definitively conclude this with regards to any other nation.
I have been predicting that the U.S. price data would continue to climb and converge with the rest of the world, but house prices in all areas are rising as well when compared to disposable income. Thus, many areas in the United States still offer investors a few compelling opportunities, and this is why the larger investors are still addin to their portfolio holdings. Although the easy money has already been made, there is still some left for prudent long-term investors. If any opportunities arise in the future, I may add to holdings as well. As of now, I am paying down debt and deleveraging on the margin.
Please note that there may be differences in the values of particular cities listed in the table below with their corresponding values in the charts above, and this may be due to variances in methodologies, including the specific geographic areas of the city, particular housing stock, as well as how annual incomes are measured. Takes these values as estimates, but you can see how some areas are still very reasonably priced.
Note: Click on each header to sort