The United States of America is the third largest country in the world. Although the States are listed after Canada, their housing stock is much better developed, and you can buy real estate in the USA in any corner of the country, and not just in its southern part, as is the case with Canada.
Advantages of buying American residential real estate
According to the National Association of Realtors (NAR), the average annual growth in housing prices in the USA over the past 10 years is about 5%. This means that buying and selling real estate in the USA is a stable asset protected from sharp fluctuations in price.
Buying real estate in America is quite simple, because all types of properties are available on the market: apartments, houses, townhouses and condominiums. Housing in popular cities such as New York or Miami is easy to rent out. For example, rental yields in Miami reach 6-8% per annum.
In general, US laws strictly regulate real estate transactions, minimizing risks for buyers, including foreigners. This is especially important given that even non-residents can get a home loan in the states, albeit under stricter conditions.
Real estate in USA: Average Prices by State
Prices on the local market vary greatly depending on the region. US real estate sites often focus on in-demand regions like California, without mentioning that it is one of the most expensive regions in the country. However, if you move away from high-demand states and pay attention to their Midwestern counterparts, such as Ohio, prices there are much more affordable.
Average cost of property for sale in United States:
| State |
Average house price ($)
|
Average price per sq. m ($) |
| California |
750,000 |
5600 |
| Texas |
300,000 |
2100 |
| Florida |
400,000 |
3200 |
| Ohio |
200,000 |
1500 |
Resale makes up a significant part of the market, but such properties often require repairs, however, their price is on average 20-30% lower than new buildings. Therefore, if you decide to buy property in the USA, be sure to pay attention to whether all utilities are connected and whether the building requires repairs.
Popular cities and areas of America for buying a home
The most popular place to buy real estate is New York. This is the financial center of the country and the leader in housing costs - an apartment here will cost an average of $700,000. Manhattan and Brooklyn are especially popular among investors.
Other popular cities:
- Miami, Florida. Miami is located on the Atlantic Ocean and attracts investors due to the high demand for rental housing. The South Beach area is built up with luxury condominiums overlooking the ocean, and Brickell is a business center with skyscrapers, where the most expensive real estate in America is located.
- Los Angeles, California. Home to Hollywood, the fashionable boutiques of Beverly Hills and the beaches of Santa Monica, Los Angeles is where local real estate is associated with luxury, but is not limited to it. The most popular are private houses, condominiums, apartments in areas such as Westwood or Downtown.
- Houston, Texas. Houston is the center of the oil and gas industry in Texas. The real estate market is well developed and offers everything from modern apartments in the center to spacious homes in the suburbs. The main feature of local properties is large plots of land next to houses (on average 0.2-0.5 acres) and low utility costs.
- Chicago, Illinois. A large metropolis on the shores of Lake Michigan with an active real estate market and moderate real estate prices. The average price of an apartment is about $300,000, and a house in the suburbs is $250,000. Rental yield in the city center is 5-7% per annum.
Features of purchasing housing in the USA
US legislation does not require special permits for foreigners to purchase real estate. The transaction can be carried out remotely by issuing a power of attorney to a representative.
To purchase housing, you will need:
- Foreign passport.
- Confirmation of source of funds (for example, a bank statement).
- Power of attorney (for a remote transaction).
- A purchase and sale agreement certified by a notary or title company.
Property owners are required to pay an annual property tax, which is 1-2% of the value of the property. For example, for a house worth $300,000, the tax will be $3,000-$6,000 per year. When selling real estate in the United States, a capital gains tax is levied: 20% if owned for more than a year and up to 39.9% for a shorter period. The non-taxable amount of profit is $250,000 for a single owner or $500,000 for a family.
Additional costs when buying real estate in the USA:
- Realtor's fees of 4-6% of the property value (usually paid by the seller).
- Attorney or title company fees of 1-3% of the transaction amount.
- Property transfer tax of 0.01-2% (depending on the state).
- Non-residents can take out a mortgage, but the conditions will be stricter: the down payment is from 30%, and the interest rate is higher by 0.5-1% per annum.
