Irish Investors, American Real Estate: Looking Beyond the Aer Lingus Cities
by: Brian.Brady on October 21, 2007 09:33:06 1 comment »
Irish investors have flocked to American real estate for it's potential and relative low cost. Ireland has experienced an economic revolution over the past 15 years. The transformation from agrarian to industrial to information-based economy has catapaulted the Irish to the second highest per capita income in the European Union (second to Luxemborg).
The property inflation in the Republic of Ireland has been equally as astounding. The growth in the construction industry and estate borking affects some 1 in 5 Irsih workers. Today, the Irish property markets are experiencing a similar fate as their American cousins: easy credit policies combined with privitisation of State-controlled properties drove property prices to an almost unaffordable level.
Wise Irish property investors recognised an opportunity in American real estate with the steady decline of the dollar compared to the Euro. Seeking to diversify their property holdings, Irish investors have been steady buyers in the "Aer Lingus Cities": Boston, Philadelphia, Chicago, and Los Angeles. The moniker "Aer Lingus cities" comes from the Irish airline's American destinations. Many Irish investors have distant family relations in America and have relied on those emigrants to provide local real estate data about the American property markets. Those distant cousins, however, have emigrated from the traditional Irish-American cities, in the Northeastern and Midwestern states, to the Southern and Western states. I am a prime example of that migration. My grandparents emigrated to Philadelphia in 1917. I moved to Phoenix, Arizona, then San Diego, California, in my adult life.
What this means to an Irish investor, looking for American real estate opportunities, is that there is a network of estate agents and mortgage brokers, with whom they may have a distant relationship, outside of the traditional Aer Lingus cities in America. The real opportunities lie in those secondary cities. Growth states like Arizona, Texas, Florida, Idaho, and Nevada, all present a better than average chance for the Irish investor to realise superior growth over the Irish property market. The devaluation of the US dollar offers it at a significant discount.
The big problem for Irish investors has been the ability to leverage the purchase through an American mortgage product. Many have remortgaged their Irish properties to pay cash for an American property. The American mortgage market credit "crunch" severely limited the loans available to Irish investors. Today, credit is gently easing and Irish investors can purchase American properties with about one third down.
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· http://www.mortgageratesreport.com/irish-investors-american-real-estate-looking-beyond-the-aer-linguHi,
Interesting article! Can you advise me on whether I can get a US mortgage (and with who) for a recently purchased property in CHICAGO? I am living and workng in Dublin, Ireland.
Kind Regards
Damien
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