In July, the National Association of REALTORS® will release its 2015 Profile of International Home Buying Activity. This annual report is very much worth your attention, especially if you work along the coasts, in a college town or in any market popular with immigrants, vacationers and/or international buyers.
Just don’t be discouraged if the figures are down a little from last year’s study. Here’s one reason why that might be the case: the rising dollar.
First, some context: Every year since 2007, NAR has surveyed its members on purchases of U.S. residential real estate by international clients. The data is based on sales made in the 12-month period from March to March, and the buyers are divided into two segments: non-residents who are generally purchasing for investment, vacation homes or short-term visits; and recent immigrants or temporary visa holders who’ve been in the States for at least six months.
The July 2014 report estimated the sales volume of international buyers at roughly $92.2 billion, an all-time high and a 35-percent increase over the previous year’s $68.2 billion total. The figure was split fairly evenly between the two types of purchasers.
The $92.2 billion estimate, 7 percent of the home sales volume for the period, offered a substantial opportunity for agents. International buyers purchased 230,000 units in the 12 months, an average of 630 per day. That’s a lot of business, and about 28 percent of NAR’s survey respondents says they worked with at least one international buyer during the period.
The growing numbers surprised no one. In a world as interconnected as ours, it made perfect sense that international clients, whether they live here already or not, would view the U.S. as a prime place to buy. A wide range of factors, from low prices to desirable lifestyle to investment security, helped attract buyers from Canada, China, Mexico, India, Europe, South America and elsewhere.
Favorable exchange rates added to that allure, at least to some degree. And although the impact of the dollar’s dramatic rise over the past year is certainly more obvious in terms of exports and travel expenses, there’s reason to believe it applies to home purchases as well.
The price of a typical investment property in Florida, for instance, would have looked more attractive to an international buyer in January 2014 than it would have in January 2015. When the dollar strengthens and foreign purchasing power declines, it follows that domestic sales to global buyers might slow as a result, especially with so many investment properties purchased for cash in recent years.
But if you’re an agent involved in this market, don’t give up. In fact, it might be a good time to double down on your efforts.
Here’s my advice: If you’re part of the 28 percent of agents assisting international buyers, stay the course. If you’ve invested time and money to learn about this segment of the business, keep it going. If you’ve connected with global agents and worked to become a go-to resource for prospective international buyers, don’t stop now. You’re still in great shape to capitalize on the unmatched opportunities our country offers to anyone in the world.
Strong dollar or not, the U.S. remains one of the best and safest places for people to put their money. That hasn’t changed.
Whether global buyers are seeking to join relatives in Seattle, provide a home for their college-age kids in Berkeley, or secure their retirement spot in Fort Myers, they tend to find what they want here in the U.S. All they need is a capable, committed agent to understand their needs and guide them through the transaction.
That agent could be you.
Vinnie Tracey is president of RE/MAX, LLC.
For more information, visit www.remax.com.
