What will the 2023 U.S. real estate market look like?

Even a crystal ball or Nostradamus may have difficulties with this one. Ultimately, the outlook for the real estate market in 2023 will depend on a range of economic and market forces, and it is difficult to predict with certainty. The one certainty we can predict, as the market goes from a sellers-market to a buyers-market, is that there will be fantastic opportunities for investors with a long-term hold strategy. Low overall inventory and skyrocketing rental yields will keep demand strong for properties, which can lead to an appreciation in value over time. 

For foreign nationals and U.S. expats looking to invest in U.S. real estate, now may be an excellent time to take advantage of these favourable market conditions. Although interest rates are higher in recent times, loan programs are more creative and aggressive, including 40-year fixed loan terms, which have given real estate investors higher yields than when the market was in a buying frenzy, and rates were sub 3%. 

America Mortgages did their annual end-of-the-year group meeting of our loan officers around the world to gauge what clients are saying regarding their 2023 strategy. The best answer came from a client in Hong Kong that owns hundreds of U.S. rental properties, 387 to be exact. His advice is; “Instead of trying to time the market, it is generally a better strategy to focus on your own financial goals and needs when it comes to real estate investing. This may involve finding properties that meet your budget, your lifestyle or investing in real estate as part of a long-term financial plan. When people are unsure, it’s an opportunity for the rest” Mic drop! 

Why invest in U.S. real estate?

One of the main benefits of investing in U.S. real estate is the potential for long-term appreciation. As the value of a property increases over time, the investment can generate significant returns for investors. This is particularly true in markets with strong demand for housing, such as major cities like New York, San Antonio, and Los Angeles, or popular vacation destinations such as Hawaii, Las Vegas, and Florida.

     

      • Appreciation: Real estate prices can increase over time, which means that property investment could potentially appreciate in value.

      • Passive income: Renting out a property can provide a steady stream of passive income, which can be especially attractive for investors who don’t want to be actively involved in managing the property.

      • Diversification: Investing in real estate can help to diversify an investment portfolio, which can help to reduce risk.

      • Leverage: It is possible as a non-U.S. resident to purchase a property with a mortgage, which means that the investor can leverage the bank’s money to make the purchase. This can allow an investor to acquire a larger property or more properties than they might be able to afford with cash.

      • Tax benefits: There may be tax benefits to investing in real estate, such as the ability to write off certain expenses related to the property, such as mortgage interest, property taxes, and repairs.

    Marry the property. Date the rate. 

    Buying a property in the United States and refinancing when interest rates go down can be a smart financial move. The first step is to secure a property. Once you’ve completed the purchase, you may choose to consider refinancing when interest rates go down. Refinancing involves taking out a new mortgage to pay off your existing one, potentially at a lower interest rate, and releasing equity. This can help you potentially save money on your monthly mortgage payments and give you additional funds to purchase more property or use it towards other investments. 

    Opportunity cost: If an investor waits for the “perfect” time to enter the market, they may miss out on opportunities to make profits in the meantime.

    Yield. Yield. Yield. 

    Another advantage of investing in U.S. real estate is the ability to generate passive income through rental properties. By owning a property and renting it out to tenants, investors can receive regular income without actively working for it and the ability to use the property as a vacation home or place to retire. This can be a great way to diversify an investment portfolio and generate additional income streams.

    The demand for rental properties in the U.S. has been strong in recent years, and this trend is likely to continue in the coming years. Although not required, for foreign nationals and U.S. expats who have ties to the United States or simply want to have a presence in the country, owning a property can be a great way to establish roots for future endeavours, such as your children attending university.

    “Real estate is an imperishable asset, ever increasing in value. It is the most solid security that human ingenuity has devised. It is the basis of all security and about the only indestructible security.” – Russell Sage.

    AM Concierge Service

    If you’re looking to purchase property in the United States, America Mortgages’ concierge service is a free service that can provide valuable assistance throughout the process, such as finding a realtor and obtaining property insurance.

    The concierge service can help you navigate the complex process of purchasing property in the United States, from finding the right property to securing financing. Whether you’re a foreign national or a U.S. expat, the team at America Mortgages can help you navigate the unique challenges and opportunities that come with purchasing property in the U.S.

    As a multi-award-winning company, our only focus is providing U.S. mortgage financing for Foreign Nationals and U.S. Expats. 100% of our clients are living and earning their income abroad.

    If you are interested in learning more about investing in the U.S. and the services offered by America Mortgages, contact us at hello@americamortgages.com

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