Property in the USA
Every so often someone
asks me about the US property market. I have to admit that these
days I donít follow the US. I find the country too troubled. It
has become an out and out police state, and the system is
running at a totally unsustainable level. How long it can carry
on without a thumping crash I donít know, but it will come. For
me, housing is a long term investment, and this is not a market
Iíd like to hold for the long term. If I were investing in the
US I have always said I would go for farmland and woodland. My
view hasnít changed. But for those of you who are interested,
here are a few pointers.
Bloomberg crunched some numbers this week to see how affordable
housing is for young adults in the 50 biggest metro areas.
In 13 of them, homes are out of reach. That is, salaries fall
well short of what's needed to buy a home according to
Strangely those 13 metro areas are the most prosperous ones,
where the young and educated stand a chance of finding work,
including the high-tech centres of Silicon Valley and Boston,
the financial centre of New York, and Washington DC.
The other problem for the relatively well educated is that they
are saddled with college debt.
One other somewhat crucial metric: apparently the families whose
head of household is under 35 have a median net worth of
$10,400. That isnít going to go far towards a 20% down payment
on a house.
Hereís a map showing the most unaffordable zones:
I hate to add one more metric, but the average wage has been
steadily declining for Americans for the past two decades. Have
a look at this chart:
I am well aware that real estate prices have gone up
considerably in some areas, but this is a lottery. I donít
advise taking part. I am getting information that in certain
areas the people are coming and they want to buy, but the
choices are scarce, and that is pushing up prices, but surely
this has to be unsustainable.
For reasonably priced property with small risk I still maintain
you would do better to buy in Britain.