US property markets to experience surge in investment supply
The US is likely to experience an influx of properties hitting the market, as rising interest rates make the market less attractive for investors.
That is according to Texas billionaire and real estate investor John Goff.
He told Bloomberg: “We’re entering a period here where there are going to be great properties that will hit a debt wall.
“We’ll be able to acquire some very attractive properties at compelling pricing.”
In the US higher interest rates make the cost of refinancing significant, as the current US Fed rate is 5.25% to 5.5% – comparable to the UK.
Issues seem to be prevalent across both the residential and commercial property markets.
On the commercial side the US is subject to high vacancies, while due to higher interest rates the cost of refinancing is significant.
Around $1.4 trillion of US commercial property loans are coming due this year, which could spell the catalyst for more stock hitting the market.
The value of US offices were down 21% in October from a year earlier, according to a report from real estate analytics firm Green Street.