Lunes, Hulyo 14, 2014

Housing mid-segments U.S.

We tend to evaluate what is happening in the housing market in the U.S. based on what comes to us with respect to the luxury segment, particularly in Miami, with great presence in our midst of late. Products extravagant, huge towers with extraordinary designs and captivating ocean views, just unique. That little niche, basically for the rich in Latin America, today has great vitality and prices never before seen. There, the housing crisis seems to have been finally forgotten.

But what is happening today with the average American home, which is naturally the bulk of the real estate market? As the demand for labor has been recomposed, and despite low interest rates, is not even fluent in mortgage loans, so that the proportion of Americans own their homes has dropped significantly and increasingly more families end up as tenant.

But more remarkable is what has happened in the last two years especially with the units of the lower socioeconomic strata. There, due to the reappearance of institutional investors on Wall Street, the values ​​have risen in a very pronounced way. In Atlanta, for example, have doubled in Miami rose more than 50%, as in Los Angeles, San Francisco and the increase was 70%. Even if these increases compare with those of the most expensive homes (excluding the analysis to the tiny super luxury segment), the upstroke there was, in fact, more moderate. In Miami, Los Angeles and San Francisco, these homes increased between 30% and 40%.

The entry of institutional investors, which in some places is very relevant (in Atlanta, for example, accounts for 14% of transactions) has a very different dynamic than it was in the age of the housing bubble. At that time, anchored mortgages, especially for the lower strata. Given the failure of that business model, far from abandoning the target, recently chose to replace the credits, which in the crisis were bad, by direct ownership of property, now to be leased to the growing population that can not access mortgage financing, betting on the appreciation that has been verified.

As always, the big marketing campaigns that support the most renowned developments are efficient to construct an image of desire, but not necessarily make us look good investment. On Wall Street knows well, and opt for low-and middle housing for rent strata.

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