Tech hubs like Silicon Valley are experiencing urban flight to get away from the hustle and bustle of the inner city. Covid-19 plays a big part in that move amid social distancing measures, but regardless, these moves are reshaping the real estate market.
Per a CNBC report, a “new wave of urban flight is reshaping real estate markets from New York to Chicago and Los Angeles to San Francisco. As part of this shift, Lake Tahoe is seeing unprecedented bidding wars, buying activity, and price increases. Brokers say the inventory of homes for sale has shrunk to about one-fifth to one-tenth of the usual levels.”
“People are writing all-cash offers for houses, sight unseen,” said Sabrina Belleci, a Lake Tahoe broker with Re/Max. “They just want to get out of the city.”
Real Estate Exposure via ETFs
ETF investors looking to cash in on real estate globally can look to fund like the Xtrackers International Real Estate ETF (HAUZ), which seeks investment results that correspond generally to the performance of the iSTOXX Developed and Emerging Markets ex USA PK VN Real Estate Index. iSTOXX Developed and Emerging Markets ex USA PK VN Real Estate Index is a free-float capitalization weighted index that provides exposure to publicly traded real estate securities in countries outside the United States, Pakistan, and Vietnam.
The MSCI All Country World Index (ACWI) ex-USA is a market-capitalization-weighted index designed to provide a broad measure of stock performance throughout the world by tracking the performance of 22 developed and 24 emerging markets.
Another fund to look at is the Vanguard Real Estate ETF (NYSEArca: VNQ). VNQ seeks to provide a high level of income and moderate long-term capital appreciation by tracking the performance of the MSCI US Investable Market Real Estate 25/50 Index that measures the performance of publicly traded equity REITs and other real estate-related investments. VNQ is up 7.26 percent year-to-date, according to Yahoo Finance Performance numbers.
Another way for investors to get real asset exposure is via real estate. One place to look is via real estate-focused ETFs like the FlexShares Global Quality Real Estate Index Fund (GQRE). The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Global Quality Real Estate IndexSM. The index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to quality, value, and momentum factors relative to the Northern Trust Global Real Estate Index.
For more market trends, visit the ETF Trends.