Shifting dynamics within the US residential market

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By Manuel Cornejo | Bricksave

April 24, 2024

News > Blog Article > Shifting dynamics within the US residential …

The U.S. residential real estate market has always been one of the most reliable in the world but it too has recently felt the negative turbulence of a global pandemic and economic upheaval. Indicators now present a renewed compelling case for investment. Here’s why we believe the current landscape is not just promising but primed for those looking for stable and lucrative real estate investments through our carefully curated opportunities. 

1. The ideal investment climate 

The macroeconomic conditions of the U.S. have strongly pivoted to growth. Inflation rates have halved over the last year, are close to target, and the Federal Reserve has tentatively shifted from 'if' to 'when' regarding interest rate reductions. This stability, coupled with a booming stock market, signals investor confidence and a fertile ground for economic expansion. 

The residential real estate market, a key beneficiary of these trends, is once again ripe for investment. Historically, interest rates have been the biggest driver of real estate market fluctuations. With rates now appearing to have topped-out and discussions about beneficial cuts underway, the market is at a turning point. Properties, currently marked down due to high rates, are at the cusp of rallying, underpinning a fundamental reason why now is the opportune moment to invest.

2. Investing in today’s market 

Bricksave target opportunities to capitalize on this unique market phase. Investment mentality is shifting from its recent defensive stance to offensive, and we are positioned to make the most of this transition. Our properties, selected for their competitive rental yields and potential to appreciate, are ideal for investors ready to seize a market on the verge of an upswing.

The US residential real estate landscape is currently characterized by an oversupply of new assets due to a post-pandemic construction boom. Combined with the macroeconomic conditions already mentioned, this has proven to have had a minor, but negative effect on both sales and rental markets. But this is a temporary dislocation and by 2025/2026, we anticipate an undersupply in, particularly, multifamily homes, which will likely lead to a sharp increase in prices. For our clients, this means there is a narrow window to invest in high-potential real estate at a relative discount, before the inevitable market correction. 

3. Performance insights and future projections 

Our recent investment performance has faced headwinds, primarily due to occupancy and/or rental issues stemming from the pandemic, including the U.S. moratorium on rental payments and delays in the processing of some Section 8 payments. This unforeseen challenge, while impacting short-term yields, has set the stage for a robust recovery. Additionally, slight downwards pressure on sales prices has been a factor, reflective of a broader market recalibration. 

However, these are but temporal setbacks in the grand scheme of real estate investment cycles. With the moratorium lifted and the market regaining its rhythm, our investment strategy remains solid, and we have appointed new local partners to pursue this strategy with increased hunger. The fundamentals are aligning to support a strong recovery and growth phase, which is why we are confident in our current offerings and their potential for substantial returns. 

Why invest through us? 

Our expertise lies in identifying and navigating market cycles, ensuring that we are ahead of the curve in adjusting to economic shifts. We have weathered the storm and are now strategically positioned to ride the wave of market recovery. Our current opportunities are not just about investing in real estate; they're about investing wisely in a market primed for growth, with the backing of a team that understands the intricacies of these unique times. 

Conclusion: a window of opportunity 

In sum, the U.S. residential real estate market is at a turning point, presenting a rare window of opportunity for savvy investors. With inflation in check, interest rates poised to drop, and a strong growth narrative, the market is on the brink of an upswing. Real estate is attractively priced, especially relative to other investment classes, and demographic trends point towards a future surge in demand.

Our current investment opportunities are designed to capitalize on this moment, offering the chance to invest in a market with strong recovery potential. While recent performance has been affected by the ripple-effect of the pandemic and market adjustments, the future is encouraging. The time to act is now, before this window closes and the full market potential is realised by others. 

Investing with us means partnering with a team that has navigated the tumult of recent years and emerged with a strategy tailored for the next phase of growth. This is your invitation to join us in seizing the current opportunities in U.S. residential real estate, with the promise of turning today’s challenges into tomorrow's successes.

Make the most out of this window of opportunity. Secure your future today.

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