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Foreign buyers may help housing market |
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The rise of the euro (currently trading at $1.36 USD), combined with the decline in U.S. home prices, presented a clear opportunity for European buyers.
"The timing couldn't be better," says Bolsen. "As a U.S. citizen, you buy in the U.S. right now at 2004 price levels. Considering the currency exchange rate, people from Europe purchase at a 2002 price point. That is very, very attractive."
So attractive, in fact, that Engel & Volkers plans to open more than 200 franchise offices in Florida alone during the next 10 years, and an equal number in New York, New Jersey and the New England states. It's also looking to expand into California and U.S. and Canadian resort areas and gateway cities.
One additional bright spot: tightening credit in the
U.S. is unlikely to discourage their clients. According to National
Association of Realtor 2006 statistics, foreign buyers were
nearly four times as likely as Americans to pay cash for their homes
(28 percent versus 8 percent), and spent more on average for the
homes they bought ($299,500 versus $221,900).
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Where to market your home on your own |
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Craigslist.org:
Craigslist has listings for cities all over the world
and posting is simple. A recent look at the London and
Frankfurt Craigslists found many Florida homes for sale.
Be sure to list your home in euros or British pounds,
not U.S. dollars. |
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Homesonsale.co.uk:
A UK-based site offers free advertisement of a home for
365 days or until home is sold with up to five photographs.
Forums include discussions about buying homes abroad. |
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Listnlook.com:
Free listing with one photo, $25 for Web site with four
photos, $50 for two-page Web site with up to 16 photos,
virtual tour and featured on home page. Listings remain
active until sold. |
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Homesgofast.com:
Based in UK with an office in Florida. Lists houses offered
by real estate agents. Individuals can also list homes
for sale. One-time fee of $69, $129 or $189 depending
on services you choose, but all listings include eight
photographs and no commission. |
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"Europeans are traditionally cash buyers," says Bolsen. "They don't like borrowing money; they cannot sleep at night if they owe money to a bank. If they can afford the luxury of having a vacation home abroad, then they want to pay for it."
Back to courting mode
Kimberly Kirschner, broker and CEO of Kirschner
Realty International in Hollywood, Fla., first started courting
foreign buyers in the mid-1990s, but stopped in 2004. "At that point,
the market was coming to us and the international buyer takes a
little more time to make a decision," she says.
Now that the pace has cooled, she's back in courting mode again.
Kirschner, who primarily represents new construction
and condo-conversion developments, knows the primary motivations
of her international clientele: Canadians want a vacation home where
they can flop in the sun for winter months, Europeans may want the
same or to use the favorable euro exchange rate for investment,
and Central and South Americans tend to want to move money out of
their unpredictable economies into something more stable.
Kirschner says the downward-facing dollar, combined
with relatively low interest rates, is helping offset the risk for
foreign buyers.
"Almost every place, the currency trades favorably
to the U.S. dollar at this point. Canadian currency is on par with
the dollar, any place that currency trades with the euro, even the
Argentinean peso looks good compared to the dollar," she says. "If
you're from a country where the interest rate is upward of 12 percent,
our interest rates are very favorable. So it's not much of a leap
to think you're getting a bargain on top of a bargain."
The wooing of the foreign buyer has commenced anew, in what has been characterized as a "buyer's market without buyers."
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