Why US property is not out of reach for Israelis
For potential investors in residential properties there are steadily increasing prices and the prospect of consistent rental income.
The Jerusalem Post Photo: Bloomberg
Much has been made of the need to reform Israel’s housing market. So much so,
that promises to make residential property more affordable became a regular
feature of the recent election campaign. With prices having increased by 20
percent since 2010, investments in the Israeli housing market are at a premium.
Nonetheless, there are still several exciting emerging markets that are worth
investigating, especially outside of Israel’s congested center.
same time though, it is an opportune moment to think a little more broadly and
look further afield. Although at first glance investing in a US property might
appear out of reach, if you know where to look, there are numerous affordable
and profitable investment opportunities.
In contrast to the market in
Israel, housing in the United States has bottomed out following the property
crash of several years ago. As a result, prices are on an upward trajectory, and
it appears that the US housing market is finally on the road to recovery. The
UBS Real Estate Research and Strategy division says prices of both new and
existing homes in the US have been rising since the third quarter of 2011, while
the median price of existing single-family homes increased by 8.8% over the same
period of time. Nonetheless, prices are nowhere near their peak levels of
Consequently, the market is in a state of gradual recovery. As
such, there is a window of opportunity, whereby purchases remain affordable
while investors can also expect a steady growth in the value of their
At the same time, the rental market in the US remains
relatively stable. If anything, with so many people having had their fingers
badly burned in the quest to purchase a home a few years ago, the demand from
would-be tenants has become more intense. For potential investors in residential
properties, steadily increasing prices and the prospect of consistent rental
income is a slam-dunk combination.
The result is both an immediate return
on investment and solid growth in the value of the asset.
While all of
this sounds good in theory, in practice, the trick is of course to find the
right opportunities. After all, purchasing property in the bright lights of
Manhattan or overlooking the golden beaches of California remains the preserve
of the rich and privileged. For the average Israeli though, there are many
affordable and sensible locations in which to invest.
The savvy investor
will look for options in a US city where prices are traditionally low but have
maintained economic stability regardless of the crash. This combination is a
recipe for a good value purchase and stable rental income. Cities such as
Houston are a good match, with the energy sector continuing to create jobs in an
area where home ownership has always been relatively modest.
standout investment location is Pittsburgh, which was voted by realestate
experts as the most promising city in 2012. Historically, it is an affordable
city, especially in comparison to other major US conurbations. Figures from last
year showed that the average cost of a home in Pittsburgh was a relatively cheap
Crucially, in recent years, Pittsburgh has also displayed an
impressive adaptability and has evolved from its industrial steelmaking past
into a city with a growing reputation in technology, health care and
In 2010, Forbes even ranked Pittsburgh as the most liveable
city in the US and one of the top 25 places to retire in 2012. The evident high
standard of living in Pittsburgh has had an inevitably positive impact on the
housing market. At the end of the day, Pittsburgh’s robust economy and desirable
lifestyle are the best guarantees of a profitable long-term
Although the debate continues to rage in Israel over housing
reform, things look unlikely to change anytime soon, and anyone who does invest
will probably continue to see unimpressive returns. At the same time, housing in
the US is beginning to prosper from the green shoots of recovery, and that
results in perfect conditions for a profitable investment. Consequently, while
considering making a purchase in Givatayim, Ra’anana or Poleg, it is also wise
to think about turning your attentions to McKeesport, Penn Hills and Carrick in
firstname.lastname@example.org Aaron Harow is a consultant at PGH
Investments Inc., a US real-estate investment firm with representation in