Low prices and a weaker U.S. dollar are driving more international buyers to invest in U.S. real estate, the National Association of REALTORS® (NAR) reports. Residential international sales in the U.S. for the past year ending March 2012 equaled $82.5 billion, up from $66.4 billion in 2011, according to NAR’s 2012 Profile of International Home Buying Activity.
“Foreign buyers recognize that owning a home in the U.S. has many benefits, both financial and social,” said NAR President Moe Veissi, broker-owner of Veissi & Associates, Inc. in Miami, Fla. “Many purchase property as an investment, vacation home, or to diversify their portfolio. In addition, many recent immigrants view homeownership as an important accomplishment. They believe that being a homeowner is one of many ways they become established in the U.S. and attain stability, security, and a sense of community.”
Find media coverage of NAR’s international report:
Most of you probably have heard the statistics that Mexico is one of the largest trading partners to the U.S. Many are also well-aware of the increase in the Mexican-American population over the last several decades.
However while we buy their goods here and they are investing in our companies here and many are moving here, are you also aware that many Americans are moving to Mexico?
While the demand fluctuates with changes in the economy and overall trends, older Americans are looking to Mexico to spend their golden years. ”Large groups of Americans can be found in San Miguel de Allende, Lake Chapala, La Paznand Los Cabos on the Baja Peninsula and the Puerto Vallarta region on Mexico’s Pacific coast,” according to the article, “Retiring in Mexico: Still An Option?” in the April issue of the National Association of REALTORS® (NAR) Global Perspectives.
Could Mexico be a potential option for a client of yours? Maybe, maybe not. Check out the link below with the full article. If not Mexico, maybe it’s somewhere else around the globe. NAR’s International property database is growing and including more and more countries. Check out the database and get a glimpse of the world of opportunity in real estate for you and your clients!
NAR recently issued the 2011 Profile of International Home Buying Activity. The international market for U.S. residential property approaches $82 billion on an annual basis. Twenty-eight percent of REALTORS® reported experience with an international client in this year’s report. Nine percent of REALTORS® reported six or more sales to international clients. International buyers came from a total of 70 countries with the top five countries being Canada, Mexico, China, U.K., and India.
Why are international buyers looking to the states to purchase property?
According to the report, here are some of the reasons:
- Many international buyers to date have been due to a transfer to the U.S. and job location.
- Some buyers are reported purchasing U.S. properties in college areas for college residences for children and investment purposes.
- Location, security and profitability are important factors influencing purchases.
- Many Canadians are looking for investment or lakefront recreational property.
- Buyers tend to cluster in specific locations based on their countries of origin, probably based on word-of-mouth and shared experiences.
- The average price paid by international buyers was $315,000 in comparison to the overall U.S. average of $218,000.
- 62% of international purchases are reported as being all cash.
To read the full report 2011 Profile of International Home Buying Activity and learn how agents specialize in this market, go to http://www.realtor.org/press_room/news_releases/2011/05/foreign_buyers
“The economic lifeboat is the multicultural consumer,” stated Oscar Gonzales, keynote speaker for the Illinois Association of REALTORS® (IAR) Asian Multicultural Summit on April 14 at the Hilton Lisle.
Gonzales is owner and founder of the Gonzales Group and a nationally known speaker and author on real estate trends. He shared trends and statistics about the Asian market to help educate Illinois REALTORS® about diverse, multicultural markets as part of the second in a series of annual IAR multicultural summits held in observance of April as Fair Housing Month. The Summit included keynote presentations, a REALTOR® and industry panel discussions and luncheon attracting close to 140 attendees.
“What are you doing to build relationships with multicultural clients?” he asked. “Housing depends on immigration. Consider building a multicultural business plan to support your outreach to multicultural clients. Make sure you have the infrastructure and business partnerships in place to support your efforts. Consumers want transparency and access to information through technology.”
Gonzales told REALTORS® that the Asian population is growing faster than the Hispanic population in some areas of the country. Here are stats and facts from Gonzales’ presentation.
- By 2010 the Asian buying power increased 475%.
- By 2015, Asian population in Illinois will have increased by 50%.
- Thirty percent of the Asian population is also under age of 18 while 50% of the Hispanic population is under the age of 18. These are future homebuyers of tomorrow.
- The Asian Indian population makes up the biggest part of the Illinois Asian population followed by Filipino and Chinese.
- Asian homebuyers are in the peak of the first-time homebuyer median age group of 30.
- 80-90% of culture is reflected in nonverbal messages including eye movement, facial gestures, hand and body gestures as well as body orientation and posture, use of distance and touching, tone of voice.
- Consider adding multicultural components to your website. Investigate Internet marketing to reach Asian homebuyers in order to break down language barriers. Consider adding information on your website about community events instead of just listings, showing community trusteeship.
- Print remains a dominant media vehicle as a primary source of news and information. Asian language television programming is growing rapidly and is available through satellite and local programming.
- Consider becoming involved in the Asian Real Estate Association of America or be involved in the chamber of commerce to offer networking venues. Get training in designations such as CIPS (Certified International Professional Specialist).
“Three major words in working with the Asian community are relationship, relationship and relationship…build it before you need it,” says REALTOR® Ann Trandai, broker-owner of Trandai Realty in Chicago, a summit panelist who discussed the Chinese culture. “Be patient and cater to needs in a more detail-oriented way to build relationships and gain trust before you dive into business. Learn to become a good listener. Patience and perseverance are virtues.”
Trandai also shared these tips:
- Learn implicit communication style including the fact that ‘maybe’ means ‘never’ and ‘yes’ means ‘no.’
- Learn different ways to say no without using the word no.
- Learn a few phrases in Chinese.
- Learn about Feng Shui and to understand Chinese belief in order to build relationship and trust.
- Try to be polite and return a favor to help them with their business or show appreciation such as a small gift. The gift symbolizes that you care to go an extra mile to think of them as family.
- The number 8 is considered lucky.
“Filipino clients will try to remain calm and in control of their emotions at all times and will avoid disagreement, rejection and confrontational behavior.” said Victoria Silvano, a REALTOR® with Century 21 SGR Chicago and a summit panelist. “In working with Filipino clients, don’t raise your voice or interrupt while clients are talking. Too much eye contact can do major damage which can be perceived as pushy or arrogant. Don’t underestimate the influence of the family unit and its effect on business in Asian culture.”
International buyers have a big impact on the U.S. real estate market—$66 billion to be exact. That is the value of U.S. real estate purchased annually by international buyers, according to the National Association of REALTORS® (NAR).
Other interesting facts: 55 percent of international buyers pay cash when buying U.S. real estate, they prefer detached, single family homes and the median price paid by global buyers is $219,400, according to NAR.
But an even more important fact to know is what “global” encompasses. It’s not just international transactions but also those much closer to home in your own backyard in the form of real estate purchased by immigrant, multilingual and cross-cultural populations in your own community.
The dream of homeownership remains strong across races, ethnicities and immigrant groups, according to Fannie Mae’s new study, 2010 Own-Rent Analysis. The study found that while immigrants tend to have lower homeownership rates initially, the gap narrows quickly the longer they live in the United States and within 30 years of arrival, their homeownership rates are comparable to average U.S. homeownership rates.
Download the full study to learn more.