Friday, February 06, 2015
U.S. home sales go international
Some of Plano real estate agent Michelle Lee’s best clients these days are coming from across the globe.
Lee and other real estate professionals around the country are getting business from foreign buyers eager to snap up homes in America.
“I get so many calls; this is an amazing time,” said Lee, who’s been in the business since 1986. “The Chinese people have a ton of money, and they pay cash.
Lee said Chinese buyers are looking for moderate- and low-priced homes they can invest in for rental. And they are buying luxury houses for their own use or for family.
“If an agent understands their culture, you can do a lot of business,” she said.
This year, U.S. real estate agents expect to sell more than $92 billion in homes to international buyers. That’s a 35 percent increase from last year.
“Among the foreigners coming in, the Canadians are buying and the Chinese are buying,” said Lawrence Yun, chief economist with the National Association of Realtors. “They are going to Florida, California, Arizona and Texas.”
Texas now accounts for about 11 percent of total international home purchases, according to data from the real-estate agents. Only Florida and California have more foreign buyers.
About 30 percent of U.S. real estate agents now say they are working with offshore clients.
“Compared to the previous year, sales to foreigners increased both in numbers of transactions and in average price,” Yun said.
The biggest growth has been in buyers from China. The Realtors association estimates total international sales from Chinese buyers rose to $22 billion in the 12 months that ended in March, up from $12.8 billion in the previous 12 months.
Canadians spent almost $14 billion, and Mexican buyers spent about $4.5 billion.
In Texas, almost 60 percent of international home purchases were by Latin Americans. But Asian buyers were second, accounting for 18 percent.
Home sales by international homebuyers contributed $11.06 billion to the Texas economy between March 2013 and March 2014 and rose to their highest level in five years, according to data from the MetroTex Association of Realtors.
Dallas real estate agent Ida Hung is originally from Hong Kong and works with Chinese buyers in Texas.
She said Texas’ housing costs are seen as a bargain to Asian buyers who are used to paying West Coast prices.
“They have gone to San Francisco, San Diego and Los Angeles to buy for a long time,” Hung said. “Now they are discovering Dallas.”
Foreign buyers this year have bought U.S. homes with a median purchase price of $268,000.
“Real estate in China and Hong Kong is very expensive,” she said. “In Hong Kong, just a small condominium can cost $1.5 million.”
Hung said some of the Chinese buyers she has represented are buying Dallas-area homes for their children.
Mario Rubio, who represents foreign buyers in the Washington, D.C., area, said that through the ups and downs of the property market, the appeal of U.S. real estate is strong in other countries.
“One of the reasons you are working with investors from international markets is they want to invest in a safe place,” Rubio said. “Buying a property in the States is a good place to put money.”
That’s why most offshore buyers pay cash, property agents say.
“Currently, we have a client that is sitting on $10 million and wants to buy a property and does not want to borrow a cent,” said Azizali Kamjee, a Canadian real estate agent who represents foreign buyers in North America. “What is the return on investment? They don’t care.”
He cautions sellers to prepare to dicker. Unlike in North America, many foreign buyers insist on bargaining for every dollar in a transaction.
“To some expectations, there is always a better price,” he said. “If you come down to zero, he will ask for two properties for that price.”
Kamjee said there has been a definite shift in where foreign buying is coming from as the economies in Europe have softened.
“Today Europe is down in the sense the European currencies are low to the dollar,” he said. “For them to bring their money into this country now is expensive, and they are buying less.
“Other countries in the East are doing much better right now and are bringing their money.”
Steve Brown, The Dallas Morning News