International Real Estate Investment Opportunities Abound...
I'm heavily involved in the international market currently. I've sold several domestic properties, and I'm making a move to "other" places.
IMHO, The United States is in the beginning of a long, cool cycle in terms of real estate growth.
I think investors enamored with the idea that seventy-four million baby-boomers entering retirement would demand vacation properties, second homes, and great retirement opportunities have jumped the gun in domestic development to stay ahead of the trend.
The result is that most of the great destinations in the United States already have the anticipated retirement trend “built-in” to the pricing which leaves very little appreciation left for the end buyer. What’s worse is that many of the great destinations have an oversupply of new units which means not only is there little chance for appreciation, but end buyers may actually experience a decline in property pricing.
Markets like Las Vegas where The Greater Las Vegas Association of Realtors recently reported that the median price of existing homes sold in December was down 2 percent from December 2005; Jay Butler of the Realty Studies at Arizona State University’s Polytechnic campus released his monthly report for December 2006 that shows that Phoenix, like Las Vegas has seen its median home price retreat 2% from $260,000 to $255,900- the lowest median price since July of 2005.
I also see global trends and tax advantages leading people offshore. We're also much more accepting of the reality of globalization...=globalization, a dramatic increase in travel, and the ‘democratization of wealth’, and the oppressive tax regimes of the industrialized nations that are choking on the tab for their massive social welfare programs has led to an increasing popularity of international real estate destinations.
There are plenty of people where I live (Naperville / Aurora IL area) that are starting to wonder if they shouldn't spend $800 a month on a household staff for a beach villa in the DR instead of $800 a month on property taxes. It's a tough question that US investors, and residents are going to come up with interesting answers to over the next decade or so...
Interesting questions Paul. Which international markets are you considering?
As for the domestic side I agree that US long term appreciation will lag international rates. I don't think it's quite as gloomy as you paint the picture. Sure 2006 was a down year, but so long as the US maintains most of the wealth / income in the world the real estate here will continue to rise. I think long term we're going to see China's income explode and once their GDP approaches and surpasses the US we will see a major shift. I'm too lazy to actually look up those numbers, maybe someone on the board will do it :lol:
I also see global trends and tax advantages leading people offshore. We're also much more accepting of the reality of globalization...I think you are spot on with this observation. However:
=globalization, a dramatic increase in travel, and the ‘democratization of wealth’,Not quite true. In fact there are many technologies that are already in place to make globalization available in your backyard. I certainly agree with the 'democratization of wealth' though. We are a corporate world where you get paid based on merit (mostly :wink:)