Real Estate Matters

Each year the National Association of Realtors (NAR) conducts a survey of its members in order to gather information regarding foreign real estate purchases in the United States and the 2008 survey has just been released.

Of particular mention is that Canadian buyers doubled from 2007. In fact, Canada and the U.K. accounted for 36.1 percent of purchases. Mexico, which accounted for the largest share of foreign buyers last year, ranked third in 2008. Single-family homes were the most popular choice among international home buyers accounting for three quarters of purchases. Slightly less than 20 percent of foreigners bought a condominium. However, the survey noted that condominiums were most popular among those foreign buyers from Canada with nearly half of all properties purchased by Canadian buyers were condominiums.

The survey also noted that international buyers purchase properties across the U.S., but the South (46.8percent) and the West (30 percent) continue to dominate. These two regions captured more than three quarters of all foreign purchases. North American buyers were more likely to purchase in the West than were those from Europe or Asia. More than half of Europeans bought properties in the South. The NAR survey said that the top four states for completed international residential transactions were Florida, California, Arizona and Texas (these four states were also the top destinations in 2007, according to the survey). In addition, the climate in most areas of the top four states is relatively mild, compared to that of Canada and most European countries.

Foreign buyers from China paid the most for their U.S. property, at a median price of $450,000, with those from the U.K. paying a median of $350,000. More than a third of buyers from India and Germany, and fewer than 33 percent of Canadians paid between $200,000 and $300,000 for their U.S. property. Also, according to the survey, four in ten paid for their U.S. property in cash and only slightly more than half of foreign buyers, 54 percent, used a mortgage to finance their purchases. The survey noted that Canadians and Germans were most likely to pay cash for their U.S. purchases.

The survey noted that the value of the dollar as compared to European and Canadian currencies has dropped over the last several years making the true cost of a U.S. property less in foreign monetary terms. The majority of respondents selling international properties noted that the weak U.S. dollar had impacted foreign sales purchases.

More than half, 55 percent, of international buyers purchased a U.S. home as a vacation property for family and friends, an increase of 8 percent from last year’s survey results. Those purchasing a U.S. property for both vacation and investment purposes were about the same as last year, with 31.6 percent.

The importance of international real estate purchases continues to increase in spite of tough economic times, and this comprehensive survey is just one way of measuring changes. If you would like further information regarding the survey, please don’t hesitate to contact me.

Cheers,

Bill Geller

Recently, as President-elect of the Sarasota Association of Realtors,  I attended the National Association of Realtors (NAR) Leadership Summit in Chicago, IL. The Leadership Summit is designed to assist Presidents-elect and chief staff executives of state and local associations to formulate programs in order to build stronger communities and influence both our businesses and our industry.

Many issues and challenges were discussed during the two day conference including international real estate issues affecting the US market, housing market and mortgage challenges, sustainable living and state of the art technology for consumers.

Foreclosure response initiatives were discussed as to how foreclosures now not only affect individual consumers but also impact entire communities. Many state and local Realtor associations are partnering with local governments and other community groups to enhance counseling services for troubled borrowers and develop strategies to help communities deal with the effects of foreclosures. NAR is working for prompt and reasonable implementation of the Housing and Economic Recovery Act of 2008. It reforms the FHA program, facilitates refinancing of problematic mortgages into fixed rate, FHA-insured mortgages and stabilizes Fannie Mae and Freddie Mac.

NAR is helping shape the industry, both domestically and internationally, by leveraging NAR’s efforts along with those of allied groups, such as the International housing Coalition, the International Real Property Foundation and others. The goal is to minimize client, customer and agent/broker risk while building a global real estate community and strengthening the property market worldwide. NAR is helping expand and unite the global real estate market by supporting alliances that work toward the common industry good. NAR maintains 76 bilateral agreements with national and regional real estate associations in 57 countries, each with a code of ethics similar to NAR’s. Through the International Consortium of Real Estate Associations (ICREA), NAR is working to set and raise global real estate standards and provide opportunities for worldwide Realtor brand marketing and adoption of U.S. best business practices including MLS, broker cooperation and transnational referrals, and – most importantly to NAR members – exposure for U.S. listings.

Through Realtor.com with over 6 million visitors per month looking at more than 4 million listings, Realtor.com is the largest Web site for homes on the Internet. In July 2008, Realtor.com began making home searches even easier. An improved user-friendly search function means consumers can find new properties more easily and quickly. The site also has a new map feature which combines listing data with Microsoft’s Virtual Earth technology. Consumers can view more listing pictures, learn more about communities, and see home value comparisons.

The 2008 leadership summit was designed to help both new and veteran leaders launch a new era for private property ownership in America and to unite the 2009 leadership and guide them toward a successful future.

Cheers, Bill