Published on and written by Cyril Jarnias
When you already own a significant portfolio of buildings in Paris, London, or Berlin, the temptation to “diversify into dollars” is strong. But which U.S. real estate market should you enter in 2026 without simply duplicating what you already have in Europe, and while accepting a very different currency and regulatory risk?
The U.S. real estate market has changed profoundly since COVID: persistently high interest rates, a slow recovery in residential, the return of foreign investors, stricter rules on beneficial owners, and a wide divergence between segments (luxury vs. mid-market, residential vs. commercial, Sun Belt vs. historic coasts). For a European investor already exposed to the euro, the key is not whether to invest in the United States, but where and how to do so in order to achieve a truly superior risk/return profile.
A 2026 backdrop: normalization rather than a crash
On a macroeconomic level, the major research houses are converging on a scenario of normalization rather than crisis. After a decade in which home prices nearly doubled, several forecasts (J.P. Morgan Global Research, Zillow, Redfin, Realtor.com) describe 2026 as a year of stabilization: price growth near 0 to 2% nationally, sales ticking up slightly, and a more balanced market between buyers and sellers.
Mortgage rates remain high by historical standards, but less volatile: most scenarios point to an average around 6.3% for the 30-year fixed, well above the COVID era but slightly below 2025. In other words, money isn’t becoming “free” again, but the shock of the rate hike has been absorbed.
New home prices are expected to rise modestly by 1% to 2.2% in 2026, in nominal terms.
For a European investor already exposed to often expensive and heavily taxed domestic real estate, the American promise is no longer about quick speculative gains, but rather about a dollar-denominated asset in a “reset” phase, with a bit more negotiating power, a gradual improvement in affordability, and a more demanding regulatory environment.
The high-end residential segment: a niche apart
One of the key takeaways from the 2025–2026 market is the growing disconnect between the high-end segment and the rest of housing. The U.S. luxury market has outperformed traditional residential real estate in both volume and value, and this trend continues in 2026.
A tight but stabilizing luxury market
Available data shows that at the start of 2026, the entry point for the luxury segment (roughly the top 10% of most expensive listings) is around $1.2 million nationally. This threshold has barely moved in a year (–0.6%), signaling a price stabilization rather than a sharp correction.
In February 2026, the entry thresholds for different sub-segments are as follows:
| Segment | National threshold (Feb 2026) | Monthly change | Annual change |
|---|---|---|---|
| Top 10% (luxury entry) | $1,205,081 | +1.0% | –3.1% |
| Top 5% | $1,987,555 | +3.9% | –0.9% |
| Top 1% (ultra-luxury) | $5,767,743 | +2.4% | –3.7% |
A dual trend emerges: a slight erosion over one year, but a continuous month-over-month rise, especially at the very top of the pyramid. The ultra-luxury threshold (top 1% of listings) has been rising for five consecutive months, from about $5.4 million in fall 2025 to over $5.6 million in early 2026, then to $5.76 million in February.
In April 2026, sales of luxury single-family homes rose nearly 7% year-over-year and 15% compared to March, despite a slowdown in new listings. The market remains favorable to sellers for houses, while the condo and townhouse segment is moving toward a better balance, but still favors sellers.
A buyer profile very different from the mainstream market
The key factor distinguishing luxury from the rest of residential is financing methods. In the high end, cash purchases dominate, reducing the impact of high rates. Figures by price range are particularly revealing:
| Price range | Share of cash purchases |
|---|---|
| $1–2M | 46.5% |
| $2–5M | 64.4% |
| $5–10M | 84.7% |
In transactions above $5 million, nearly all buyers use their own liquidity or private financing, making them relatively insensitive to traditional bank rate movements. For a wealthy European investor accustomed to structures through private banking, this pattern is very familiar.
Moreover, this segment is fueled by several specific dynamics:
– An estimated $6 trillion generational wealth transfer in 2025, creating a new wave of demand for legacy real estate.
– Rising fortunes in China and India seeking to secure dollar-denominated assets in jurisdictions perceived as more stable.
– Increased demand for multi-generational homes offering security, privacy, and integrated services.
Luxury buyers are increasingly geographically mobile, ready to arbitrate between historic coasts (New York, California, Hawaii, coastal Florida, Connecticut) and new lifestyle markets (Prescott, Heber in Utah, Boise, etc.). The choice is less about gross rental yield than about scarcity, prestige, and quality of life.
Ultra-prime markets vs. “accessible” luxury
Within the luxury segment, regional disparities are extreme. Some areas have stratospheric entry thresholds, such as Heber, Utah, where access to the high end is around $7.25 million. Other metros, conversely, offer a form of “accessible luxury”: San Antonio stands out with a 90th percentile entry threshold around $750,000, and many Southern and Midwestern markets rank among the top 10 most affordable luxury markets.
In expensive coastal markets like San Francisco or Los Angeles, gross yields are around 2% to 3%.
For a European investor already over-exposed to very expensive and low-yielding assets (Paris, London, Zurich), the logic often involves seeking in the U.S. either rare and defensive ultra-prime assets, or conversely, more accessible luxury that generates cash flow.
Classic residential: a “great reset” rather than a collapse
Outside luxury, most major observers describe 2026 as a “great housing reset”: a multi-year period in which the market gradually rebalances after the COVID frenzy.
Central forecasts include:
– Very moderate price increases (about 1% to 2.2% in 2026).
– A noticeable improvement in affordability thanks to wages rising faster than rents and prices.
– The share of income going to mortgage payments should fall below 30% (around 29.3%), a first since 2022.
– Inventory of homes for sale up about 9% year-over-year, giving buyers a bit more room to maneuver.
Of the 100 largest metros, 22 are expected to see price declines in 2026, primarily in the Southeast and West. In Florida, seven of the eight largest cities are expected to see price drops, with the exception of Miami.
For a European investor thinking in 10- or 15-year terms, this context looks more like a gradual entry point than a speculative window. You don’t buy to resell two years later, but to capture rental yield in dollars, benefit from the real erosion of debt value through inflation, and arbitrate later when the cycle is more mature.
U.S. commercial real estate: multifamily, industrial, data centers, and neighborhood retail
Beyond residential, the real paradigm shift in 2026 is happening in private commercial real estate. Values bottomed out at the end of 2024, remained broadly stable in 2025, and projections now point to average price growth of nearly 5% in 2026.
Global institutional investors have begun to reposition: according to several surveys, about 87% of investors managing over $1.4 trillion in real estate assets plan to increase their direct allocations in 2026. The “buy rating” given to the U.S. market in the Emerging Trends in Real Estate 2026 report has even reached its highest level in 20 years (3.74 out of 5).
A rebound in volumes and a return of capital
Transaction figures confirm this renewed interest. The investment volume in U.S. commercial real estate reached about $499 billion in 2025, up 22% from 2024, with the fourth quarter at nearly $172 billion (+29% year-over-year). For 2026, CBRE anticipates another 16% jump, bringing volume to around $562 billion, close to the pre-pandemic annual average.
European capital is attracted by improved financing conditions and more attractive prices than in Asia or Europe. Global investors are primarily targeting three segments: multifamily, industrial/logistics, and data centers, with cautious interest in certain prime office and grocery-anchored retail properties.
Multifamily: the right time to position for the cycle
Multifamily rental housing remains a favorite among global investors. However, this segment has had to absorb a massive influx of new deliveries in recent years, especially in the Sun Belt and mountain regions, which temporarily pushed up vacancy rates.
Recent data shows that:
– The national apartment vacancy rate has peaked and is expected to decline gradually throughout 2026, aided by a sharp slowdown in new construction starts.
– High financing and construction costs have made many new projects unfeasible, causing starts to fall to a 15-year low.
– Annual deliveries are expected to drop to around 230,000 units in 2026, 40% less than the 2024 peak.
Existing inventory will continue to fill due to high homeownership costs, keeping rental demand strong. After three years of near stagnation with regional disparities, rents are expected to rise about 2% in 2026, a pace aligned with inflation.
Over a five-year horizon, several analyses consider multifamily, industrial, and well-positioned retail to be the segments offering the best balance of yield and fundamentals. Offices remain the poor cousin, except in a few prime submarkets where demand is concentrated.
Industrial and data centers: extending the logistics cycle
The industrial sector has slowed somewhat from its record years, but remains under close scrutiny by investors. Demand for logistics space, infill warehouses, and big-box facilities remains robust, particularly in hubs like California’s Inland Empire, Texas, Dallas, Phoenix, and Columbus, Ohio. Rents have slowed, but the scarcity of well-located land and the rise of e-commerce continue to support long-term prospects.
Data centers have become a highly sought-after asset class, driven by demand for cloud, AI, and video. Leasing is at record levels, and 2026 promises unprecedented absorption volume. For European investors, direct access is difficult but possible through specialized REITs or dedicated funds.
Retail: the return of “everyday needs” neighborhood centers
Long overlooked, retail is rebounding where it aligns with real consumption: neighborhood shopping centers anchored by a grocery store, open-air retail in affluent residential areas, and destination retail in tourist or luxury markets. Investors are seeking centers with sustainable rents, strong anchors, and located in areas with high household incomes.
In terms of yields, forecasts point to capitalization rates tightening by 5 to 15 basis points in 2026 for most asset types, with slightly more compression on higher-quality properties. Total returns will be driven primarily by income rather than appreciation.
The special case of office: handle with care
Office remains the blind spot in many investment plans, especially for European investors who often already have a lot of office in their portfolios. In the U.S., the office segment officially hit its value bottom in the second quarter of 2025, after the rest of the commercial market.
Recovery signals are mixed:
Summary of highlights: strong absorption rebound, slowing construction starts, and growing polarization between performing and obsolete assets.
The third quarter of 2025 recorded the strongest office absorption observed since spring 2019, marking a return to some market normalcy.
Construction starts have slowed, limiting the risk of future oversupply, especially for the latest generation of buildings.
Performance is extremely polarized: new or renovated, prime, well-located properties stand out, while older, obsolete stock continues to suffer.
Global investors who remain exposed to office primarily target New York and, to a lesser extent, San Francisco. The five-year outlook for office as a whole is still considered unfavorable, prompting many large pools of capital to focus on other segments.
For a European investor already heavily invested in domestic office, it is generally more rational to use the U.S. to diversify into other asset classes (multifamily, industrial, grocery-anchored retail, data centers) rather than adding another layer of structural risk.
Where to invest geographically when coming from Europe?
Geography is at the heart of a smart strategy. The United States is not a single market, but a mosaic. In 2026, several trend reports rank the best cities for real estate investment, with the U.S. top list including Dallas/Fort Worth, Jersey City, Miami, Brooklyn, Houston, Nashville, northern New Jersey, Tampa/St. Petersburg, Manhattan, and Phoenix.
At the same time, other studies emphasize the dominance of Florida and Texas in foreign investor flows. These two states attract a disproportionate share of international capital, drawn by the absence of state income tax, explosive population growth, and an expanding economic base.
Florida vs. Texas: two complementary profiles
The fundamentals of these two Sun Belt giants differ but complement each other.
In Florida, demand is primarily driven by lifestyle (climate, beaches, favorable tax environment), attracting wealthy retirees and remote workers. Tampa, Orlando, and Miami concentrate strong demand, pushing up prices and rents, but insurance costs are high in hurricane-prone areas.
In Texas, the primary magnet is jobs. The state is attracting businesses en masse in technology, healthcare, manufacturing, and energy, concentrated in major metropolitan hubs: Dallas–Fort Worth, Houston, Austin, San Antonio. Labor mobility creates stable and predictable rental demand, ideal for buy-and-hold strategies.
The tax framework is similar: neither jurisdiction levies a state income tax, but Texas compensates with higher property taxes (often 2% to 3% of value annually, compared to 1% to 2.5% in Florida). Insurance, on the other hand, is generally less expensive in Texas, especially in non-coastal areas.
Florida attracts with a high-end clientele and appreciation potential through lifestyle and seasonal rentals, while Texas relies on stable cash flows and lower entry points, easy to replicate for scaling up.
Gross yield focus in the Southeast and Texas
A sample of markets clearly illustrates this differential:
| City | Estimated median price (end 2025) | Estimated gross rental yield |
|---|---|---|
| Dallas (TX) | ~$425,000 | ~6.5% |
| San Antonio (TX) | ~$309,000 | ~6.8% |
| Jacksonville (FL) | ~$282,000 | ~6.2% |
| Cape Coral (FL) | ~$338,000 | ~5.9% |
| Port St. Lucie (FL) | ~$383,000 | ~6.0% |
In these cities, median prices remain far lower than in European capitals, while gross yields exceed 6% in most cases, and even higher in some submarkets. For a European investor used to gross yields of 2–3% in Paris or Munich, these figures represent a complete paradigm shift.
“Value-forward” markets and prime metros
At the other end of the spectrum, markets like Detroit–Warren–Dearborn or St. Louis appear in rankings as “value-forward” luxury markets: they offer an attractive price-to-quality ratio for high-end properties, with above-average yield prospects.
Conversely, the most expensive markets remain heavily concentrated on the coasts and in resort areas: several California markets (San Francisco, San Jose, San Diego, Los Angeles), Hawaii, the Florida coast, and Connecticut. These markets are difficult for a foreign investor to grasp, as rental yields are low and regulations sometimes complex, but they can play the role of a “safe-deposit box” for wealth.
Managing currency risk when coming from the euro
For an investor based in the eurozone, the dollar is not neutral. After a 2022–2024 cycle marked by outperformance of the greenback and high hedging costs, many investment banks describe the 2026 environment as a “post-dollar-peak” landscape: the dollar fell about 9.4% in 2025 (DXY index), and a further decline of about 5% is anticipated in 2026 by some major institutions.
Several factors are at play:
The Federal Reserve is moving toward a neutral rate of 3–3.5%, while the ECB is taking a cautious approach. The narrowing of the rate differential reduces hedging costs for eurozone investors. Eurozone growth could be slightly above expectations, but U.S. political, fiscal, and stock market uncertainties increase the risk premium on dollar-denominated assets.
In this context, short- to medium-term currency movements of 5% to 10% remain entirely plausible, which is far from trivial for multi-million-dollar assets. Studies cited indicate that buyers using euros, yen, Swiss francs, or Swedish kronor have benefited from purchasing power gains of around 5.6% to 8% over one year simply from currency fluctuations, independent of the property’s dollar price change.
For a European investor who already has a substantial portfolio in euros, the right approach is not to speculate on exchange rates, but to structure the investment.
– Finance as much as possible in dollars to match the currency of the asset with the currency of the debt, reducing net currency risk.
– Spread exposures over time rather than concentrating the investment at a single market point.
– Use hedging instruments (forwards, swaps) selectively, especially around signing and closing dates.
– Think of the investment as structural diversification into dollars rather than a directional bet on EUR/USD.
How to enter: direct, U.S. structure, or listed vehicle?
For a sophisticated investor, the “how” matters as much as the “where”.
– Direct access allows control of the asset but requires mastering a complex tax and regulatory environment (FIRPTA, local taxes, reporting, ownership structures).
– REITs and listed or unlisted funds offer liquid and diversified exposure, with dividend yields around 3% to 6%, and often a natural alignment with winning segments (multifamily, logistics, data centers, healthcare, etc.).
– Club deals, syndications, or thematic private funds allow targeting niches (Sun Belt multifamily, grocery-anchored retail, data centers) with an experienced local sponsor.
European institutional investors allocate an average of 14% of their portfolios to commercial real estate, above their target of 13.9%.
Applied to a European already well-served with core assets in the eurozone, this matrix argues for using the U.S. primarily for “cash flow” pockets (Sun Belt, Midwest, Southeast) and “growth” pockets (Florida luxury, data centers, certain niche markets), rather than for core “Europe-bis” type assets.
Which pockets to prioritize in practice when you already have substantial wealth in Europe?
By cross-referencing market, currency, tax, and asset type factors, several segments emerge as particularly relevant for a wealthy European investor in 2026.
1. Quality multifamily in the Sun Belt and Midwest
U.S. multifamily combines several attractive characteristics: rental demand supported by homeownership unaffordability for part of the population, the prospect of declining vacancy in 2026 thanks to a collapsing construction pipeline, and sustained yields in growth regions.
For a European already heavily exposed to European city-center housing, the priority may be:
– To target Sun Belt markets where the 2023–2025 oversupply is being absorbed (Dallas–Fort Worth, Phoenix, Atlanta, certain Florida and Texas cities), with a 5- to 10-year horizon.
– To combine with Midwest or Northeast markets offering robust fundamentals and contained vacancy (Chicago and its region, some urban Northeast nodes).
This is not about shifting everything to the Sun Belt, which is exposed to migration cycles and climate risks, but about leveraging higher yields while managing them with strict discipline: an additional vacancy buffer, conservative rent assumptions, and a higher exit cap rate.
2. Urban industrial and regional logistics
U.S. industrial remains a solid foundation for diversified portfolios. For a European, several strategies stand out:
– Infill warehouses in major metropolitan areas, benefiting from land constraints and the growth of last-mile delivery.
– Large logistics hubs in growing corridors (Texas, Arizona, Midwest), where demand remains driven by e-commerce, supply chain reorganization, and nearshoring.
Yields on these assets are less spectacular than at the peak of the crisis, but remain higher than what is observed on comparable assets in many European capitals. The long-term trajectory is still supported by the real economy.
3. Data centers via specialized vehicles
For a family office or a European private investor, direct access to a U.S. data center can be complex. However, exposure to this segment through REITs, closed-end funds, or structured co-investments with a specialized operator allows playing the digital infrastructure theme without taking on direct operational risks.
Long-term trends (AI, cloud, streaming, 5G) generate demand that extends beyond the 2026 economic cycle. The main risk is energy and environmental regulation, hence the importance of choosing operators that are adept at managing these issues.
4. Grocery-anchored retail and neighborhood centers in affluent areas
Neighborhood shopping centers anchored by a supermarket or a strong discount store, located in high-income areas, are among the “safe haven” assets in U.S. retail. They combine:
– Relatively stable rental streams.
– Exposure to everyday spending rather than discretionary purchases.
– A moderate but steady ability to increase rents.
Real estate risk here is primarily micro-level, tied to location, anchor tenant, and tenant mix. To access this segment more easily, favor funds, REITs, or locally managed club deals.
5. Selective luxury residential: Miami, New York, some lifestyle markets
For a very wealthy European investor, the luxury segment can play a dual role: diversification and an enjoyment asset. Several points to consider:
– Miami is now the U.S. market with the largest inventory of homes worth over $1 million, ahead of New York, and remains the Florida exception where prices are not expected to decline in 2026.
– New York retains extraordinary international appeal, even if some studies point to price declines in certain parts of the state.
– Resort markets like Aspen, or certain lifestyle destinations like Prescott, Heber, or Boise, are experiencing dynamics tied to scarcity and quality of life.
In these environments, typical strategies for a European are either to acquire an ultra-prime property with a very long-term view, or to target high-end products that are still “value-forward” compared to their European equivalents, accepting lower rental yields but a high wealth-preservation profile.
What to avoid or treat with extreme caution
Not all opportunities are equal, especially in a year of market recalibration.
Several mistakes are regularly flagged for 2026:
Overleveraging by extrapolating rate cuts, promising appreciation without coherent cash flow, ignoring local regulations, and assuming rent growth will compensate for a poor entry price.
The United States has also tightened its regulatory arsenal regarding all-cash purchases through shell companies. FinCEN’s geographic targeting orders (GTOs) require disclosure of all-cash luxury home purchases in certain areas, and a federal residential real estate rule is set to generalize this transparency requirement in early March 2026. In states like Florida or Texas, specific laws also restrict land acquisitions near sensitive infrastructure for nationals of countries deemed adversarial.
For a European investor, these rules are not necessarily barriers, but they imply working with North American tax and legal advisors who are very up-to-date on these developments.
In summary: how to complement a European portfolio with America in 2026
An investor who already has a substantial wealth in Europe faces several major strategic choices:
– Is he primarily seeking a growth driver in dollars, a cash-flow supplement, or a high-end enjoyment asset?
– Does he want to diversify his sector exposure (moving away from office and city-center residential) or simply replicate what he has by changing continents?
– How much room does he want to give to currency risk, knowing that hedging costs are evolving and the dollar appears to have passed its peak?
The 2026 data outlines a few clear axes:
U.S. residential is normalizing in favor of buyers, while luxury remains driven by global wealth. Private commercial real estate offers an entry point after a trough, with capital returning to multifamily, industrial, data centers, and grocery-anchored retail. The Sun Belt (Florida, Texas) attracts foreign investors with attractive yields, but requires rigorous selection in the face of climate, tax, and political risks. Currency risk can impact returns by several percentage points, incentivizing structuring via dollar financing, partial hedging, or gradual deployment.
For an already well-endowed European portfolio, the goal is not to bet everything on America, but to add it as a complementary layer: pockets of multifamily and industrial in growing markets, some tactical exposure to data centers or grocery-anchored retail, and possibly one or two ultra-high-end residential assets in globally recognized markets. In 2026, the U.S. real estate market no longer offers the mirage of easy appreciation, but it offers seasoned investors a sophisticated playing field where the selection of segments, cities, and structures will make the difference.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
