As the housing market continues down the long, winding road to recovery, a growing number of foreign buyers are helping to drive it forward, lured by tantalizingly low real estate prices and the prospect of residency in the US.
Of course the recovery we’re seeing isn’t only down to foreign investment. There are plenty of markets in the country where outside investment is almost unheard of, and many of these are trundling along just fine. But when it comes to some of the most dynamic markets in the US right now – Florida, for example – it’s clear enough to experts that overseas money is fuelling much of the growth in real estate right now.
“The Property Market in Florida is booming and we are seeing upcoming growth appearing all over the State. This includes a strong Canadian interest in Florida’s property market,” says Garrett Kenny, CEO of Century 21 Team Feltrim.
“This is particularly high during the snow season. Canadian buyers come here to enjoy the beautiful weather, beaches and star attractions that Florida has to offer.”
These sentiments are backed up by hard facts – non-US citizens accounted for about $82 billion worth of real estate transactions in 2012 according to the National Association of Realtors, with the bulk of this money arriving from Canada, China and Latin America.
Whilst Canadians remain the biggest foreign buyers of US real estate, the hottest demographic right now lies in China. These buyers, flush with riches from China’s healthier economy, can’t get enough of US real estate right now, buying up high-end and high-priced homes across the nation in desirable locations like California, New York and of course, Florida.
But for all the importance of Chinese money in driving US real estate’s recovery right now, much of the credit for making these deals happen goes to the visionary real estate brokers who are actively seeking out buyers. Century 21 Team Feltrim is one of the pioneers of these efforts, making several successful trips to Asia over the last couple of years to foster ties with Chinese real estate agents and make the case for opportunities in Florida real estate.
During his most recent trip, the first ever OPP Tour of China which covered four cities in the space of ten days, Team Feltrim’s Garrett Kenny met with over 200 Chinese agents and investors, an experience that opened his eyes to just how big an appetite for US real estate Chinese buyers have right now.
“I have been to China a few times and each time until this one I have gone back uncertain that I had “cracked it”,” articulated Kenny.
“Whilst OPP were careful to manage expectations and were keen to stress that results wouldn’t be immediate I have to say that OPP have impressed me hugely with this tour. Three days back and already dealing with 3 agents successfully. We will certainly be going on more tours with OPP in 2013.”
It’s not difficult to see why the Chinese are so interested in buying Florida homes. In the US, your money goes so much further than in China’s overheated real estate market, where a two-bedroom apartment in Shanghai can cost in excess of $2 million, and where the government is already placing harsh restrictions on buyers to cool things down.
Florida’s real estate market is almost tranquil in comparison, with the average three-bedroom home in Clermont, Lake County, selling for just $201,627, according to Trulia.com. In addition, there are still plenty of bargains to be had – as of April 2013, there were just under 25,000 foreclosure listings in the state.
“They see Florida as the perfect location to invest their money and to someday retire,” says Kenny. “There’s a massive opportunity for foreign buyers as interest rates are at a low and we are witnessing a steady growth making buying property in Florida a perfect investment.”
But value is just one factor driving this influx of Chinese buyers. Equally important in their eyes is the status, or “face”, that they gain from owning a piece of US real estate. As Betty Chan, a Las Vegas-based real estate who deals with Chinese buyers points out in an interview with Fox News, buying a home in America is something they can show off about to their friends:
“It’s a sign of status. You can show off that you can afford to buy something overseas, it’s not something that everyone can do.”
“Most Chinese like to own a Mercedes… It doesn’t matter if its a good car or not, its just showing off their status. In the same light, owning a foreign house is just as prestigious in China, so they’re proud to tell their friends.”