The US real estate market: Comprehensive guide for buyers

How high are US real estate prices?

The US real estate market currently shows dynamic development with regional differences. US house prices vary significantly depending on location and property type. The average price of an apartment for sale is $4,849 per square meter. For houses for sale, the average price is $2,660 per square meter.

Regional price differences in detail

New York: As one of the most expensive metropolises, New York offers high US real estate prices, but also stable value appreciation. In New York, average property sale prices have more than doubled in some cases since 2009.

Florida: The Sunshine State remains particularly popular with German investors. The US housing market trends show above-average value appreciation here. Many German buyers choose a villa for sale USA in attractive Florida locations.

Los Angeles: The average price of an apartment for sale is $8,026 per square meter. For houses for sale, the average price is $8,933 per square meter. These prices reflect the high demand in the West Coast metropolis.

How much does an average house cost in the US?

The costs for an average house vary considerably by region. In attractive markets like California or New York, buyers must expect significantly higher prices than in states like Texas or Alabama.

Price range by regions:

How expensive is rent in the USA?

Rental prices in the USA show significant regional differences and can be surprisingly high for German tenants. Particularly in metropolitan areas, rental costs reach peak values that often significantly exceed German major city rents.

New York City - The Most Expensive Territory

The metropolis on the East Coast leads the rental price list with peak values that are exceptionally high even by German standards. A 1-bedroom apartment in the city center of New York costs an average of $3,815 monthly, while the same apartment size outside the city center still demands $2,783. A 3-bedroom apartment in the city center costs €$,214, outside the center it's $5,135.

Other major cities in comparison

• Los Angeles: 1-bedroom apartment in city center: $2,360, 3-bedroom apartment: $4,471

• Miami: 1-bedroom apartment in city center: $2,726, 3-bedroom apartment: $5,276

• Chicago: 1-bedroom apartment in city center: $2,241, 3-bedroom apartment: $4,234

Understanding Regional Differences

While coastal cities and tech centers demand premium rents, Midwest and Southern states offer significantly more affordable options. In Mississippi, one of the cheapest states, average monthly rents for normal apartments of 80-100 square meters are often around $600 to $800 per month.

Where are US property prices cheapest?

For price-conscious buyers, several states offer attractive entry opportunities with significantly lower US real estate prices than in the well-known metropolitan areas.

The cheapest states in detail:

West Virginia: West Virginia is widely considered the cheapest US state for home buyers. With fewer than 2 million residents, it's one of the smaller states. Prices here are particularly attractive for German investors. The proximity to the Appalachians makes it ideal for nature-loving buyers. With an average age of 40 years, the state has the oldest population in the USA.

Oklahoma: The average value of a house in Oklahoma is $150,000 - significantly below the national average. With more than 4 million inhabitants, it's the 28th most populous state in the USA. Popular cities for buyers are Tulsa (median home value $130,000) and the capital Oklahoma City (median home value $160,000). The state benefits from its natural resource endowment and offers stable economic conditions for the US housing market.

Alabama: The average value of a house in Alabama is $155,000, making prices very attractive. The state is known for its automotive industry and cotton cultivation. Popular cities for investors are Birmingham (median home value $80,000 - $90,000) and Montgomery (median home value $120,000). However, the notoriously hot summers should be considered, while winters are relatively mild.

Other Affordable Markets: States like Mississippi, Arkansas, and parts of Tennessee also offer attractive entry prices. These regions are characterized by low living costs and often stable rental markets, making them interesting for yield-oriented investors seeking homes in the USA.

How will US real estate prices look in 2026?

Forecasts for US housing market trends show a significantly more relaxed market situation than in recent years. After extreme price increases during the pandemic, experts expect market normalization.

Moderate Growth Forecasts

Experts expect a gradual increase in US property prices, with forecasts predicting a 2% increase in 2025 and another 2% in 2026. This development stands in stark contrast to the dramatic price increases of up to 20% annually during the pandemic years 2020-2022.

Factors Influencing Price Development

The moderate growth is influenced by several factors. High mortgage rates of currently over 6% dampen demand and stabilize prices. At the same time, continued population growth, particularly from the Millennials generation coming of purchasing age, ensures fundamental demand.

Regional Differences Remain

While the national average records moderate gains, regional markets will develop differently. The Sunbelt - states like Florida, Texas, Arizona, and Georgia - will likely record above-average growth rates. Cities like Dallas-Fort Worth are expected to be leading markets in 2025.

Risk Factors and Opportunities

Climate change and natural disasters are beginning to influence US real estate prices. Areas with high insurance costs due to hurricanes or wildfires could experience slower price increases. For smart investors, this creates new opportunities in the US property market - in previously overlooked markets with stable climate conditions.

Are real estate investments in the US a good investment?

The American real estate market offers both opportunities and risks for potential investors. Careful consideration of pros and cons is crucial for successful real estate investment in the US.

Advantages of US real estate as investment

Economic Stability: The stability and growth of the US economy make the country ideal for real estate investments. The USA has a robust economy and stable political structures that support the US housing market long-term.

High Yield Opportunities: In the USA, you can expect returns of 15% in the development sector. In luxury real estate development, returns of up to 45% are also possible - particularly with exclusive projects.

Legal Security and Transparency: The US property market is characterized by high legal security and transparency, making real estate a trustworthy investment.

Population Growth: The USA hosts diverse and growing populations, driven by immigration and natural population growth. This sustainably supports demand in the US real estate market.

Disadvantages and Risks

High Mortgage Rates: High mortgage rates and more expensive insurance in certain states can reduce profitability and make prices less attractive for buyers.

Market Volatility: There is currently great uncertainty about how the US housing market will develop in the coming months. This volatility can significantly influence US house prices.

Complex Tax Regulations: Foreign investors must consider various tax types that can affect returns. For German buyers, aspects of the double taxation agreement must also be considered when acquiring property in the USA.

Currency Risk: Fluctuations of the US dollar against the Euro can significantly influence the investment and change actual prices for German investors in the American real estate market.

What legal framework must be considered when buying real estate in the USA?

Acquiring real estate as a foreign buyer requires attention to various legal aspects that differ significantly from European systems.

Basic differences from European legal systems

Unlike Germany and Austria, there is neither a completely codified civil code nor a notary in the European sense in the USA. The American notary only has authentication functions, while legal advice is provided by attorneys.

Property transfer and land registry

For lawful transfer, a transfer deed (Warranty Deed or Quit Claim Deed) suffices, which is signed by the seller, authenticated by a Notary Public, and finally handed to the buyer.

Tax aspects

Property Tax: Unlike the German standard value, the value of an American property is set annually and serves to collect property tax, which typically ranges between 1-2% of the assessed value.

Rental Income: When commercially using a property through leasing or renting, federal income taxes apply. If the landlord is a foreigner, the tenant must withhold 30% of the gross rental amount and remit it to the federal tax authority.

Recommended legal forms

For German buyers, various structuring options are available:

Limited Liability Company (LLC): Purchasing real estate through an LLC is treated tax-wise similarly to direct purchase as a private person. The decisive advantage lies in liability protection: In case of legal problems or losses, you only liable with company assets, not with your private assets.

US Corporation: Also provides protection from personal liability but is associated with higher tax burdens than the LLC variant.

Important steps when buying

Selection of Experienced Advisors: Choose an attorney and tax advisor who are experienced in international business transactions.

Broker Selection: Find a broker you trust and work exclusively with them.

Financing: German buyers typically require higher down payments and must expect higher interest rates.

Conclusion

The US real estate market offers German buyers diverse opportunities for successful real estate investment. From affordable villa for sale USA in Alabama to luxury properties in California - with proper advice and careful planning, you can benefit from the opportunities of the American real estate market. Current US property prices and their development show that despite moderate growth forecasts, attractive returns remain possible. Particularly important is early involvement of legal and tax experts to optimally structure all aspects of your investment and properly evaluate US real estate prices.