Just arrived back from America - here's what I learnt
I've just returned from a trip to the USA. America is an amazing country in my opinion, it's the land of extremes when it comes to the western world.
I must admit, I can't help but get a huge buzz when I step onto their soil. Most of the people I met in America were fantastic, upbeat and very welcoming.
They are in a really interesting point in their economy at the moment. It could really go either way for them - yet most seem to think that a few hard years are ahead of them.
My travels were in California and comprised San Francisco for the most part, with a look at LA, The Valley, Napa and Sonoma. For the fourth time I was blown away by the size of this place, even wine districts like Napa had major roads that were clogged by traffic jams, much bigger than we get here in Melbourne.
It's a busy place, that's for sure. No doubt about it, America was built to scale.
Mostly I stayed in a loft right in the heart of San Francisco that was close to a conference I was attending. You can see an apartment in the building that is for sale at present - apartment.
This is an extremely well built apartment and it was noticeable that the construction quality was well above most places I see in Australia. These typically will now fetch a price in the mid $500,000 price point and you'd expect a healthy return of about $650 per week.
Maybe plenty more if you went the short term accommodation path.
This very place back in early 2007 would have sold for the $800,000 mark - maybe more.
Good real estate has been hit, but places like this have actually done well compared to many outer areas.
Fact is that the supply of housing is too great. They have the opposite problem that we have in Australia. Many agents I spoke with there talked about the pricing being below replacement value. Many homes are purchased well below what it is possible to have them built for.
Areas like Sausalito in San Francisco are just stunning and many sale boards and the like were not too noticeable throughout. I took some quick footage below with my phone of how these area is, it feels a little like Vaucluse in Sydney over the harbour. Really stunning place and you can still expect to pay millions for a good home here.
Noticeably I've seen people encouraging Melbourne investors to get into the USA real estate scene. These are often designed as seminars trying to encourage locals here to buy.
Just some words of caution here, while I think American real estate is a great opportunity it seems that America hasn't completely bottomed out yet. Also factors such as currency exchange rates need to be carefully considered but probably the biggest factor is area. America has some areas that would rival third world countries in terms of being in poverty.
A friend of mine Stephen who helps run www.foreclosure.com has seen his business boom. Perhaps America's biggest foreclosure website, Stephen has sited listings for $50 in Detroit as part of his site. Believe me here - this will not be the best $50 you've ever spent! Many places here have no future are are facing the bulldozer, even though many are good homes.
So it was a good trip all up. I took plenty back and was yet again impressed especially by the advancement in technology that the bay area in San Francisco as well as the Valley are taking. Some big things are happening with consumer experience in Real Estate, and many changes are going to happen over the next few years that we will also see in Australia.
