Real estate agents brace for return of foreign buyers as travel ban ends
(TheRealDeal) – Doors are opening and residential agents in major U.S. markets such as New York and Miami are bracing for a resurgence of foreign buyers.
Potential buyers who have been on the sidelines since the pandemic began last year are meeting with their agents in the United States now that the travel ban was lifted on Monday for 33 countries, including some in the United States. European Union, United Kingdom, China, Canada, Mexico, Brazil and India.
Foreign home purchases in the United States fell from April 2020 to March 2021, according to the National Association of Realtors, down 27% to $ 54.4 billion, from the previous year.
While these buyers were absent, house prices skyrocketed and inventories fell to record levels in some cities.
Broker Enzo Rosani, a partner of Barnes International in Miami that works primarily with European clients, said its buyers were coming to South Florida “at the same time” now that the ban has been lifted. He prepared them by finding short-term rentals for them and by organizing screenings and appointments at points of sale. Its clients are looking for condos with prices ranging from around $ 700,000 to $ 2 million and more.
Supply is an issue, especially as Miami enters its peak season. In South Florida, sales of single-family homes have skyrocketed over the past year and a half, with many locals now shut out of the market and opting for condos.
“The market is super intense and stocks are low,” Rosani said, citing an intensification of bidding wars. He organized as many screenings as possible to give options to his clients. “Europeans hate [bidding wars]. As soon as they feel rushed, it’s a turning point.
Craig Studnicky, broker and CEO of International Sales Group in South Florida, said “every real estate agent” in the area has heard from their international clients, especially from Canada, Colombia and Peru.
“I think they are going to be mostly disappointed with the lack of supply of houses,” Studnicky said. “There just isn’t much to buy, so they’re going to be very frustrated with that reality. But there are condos to buy.
Brokers have also traveled outside of the United States to present new condo developments.
Edgardo Defortuna, president and CEO of Miami-based brokerage and development firm Fortune International Group, said his agents had traveled to promote preconstruction projects in Mexico, Chile, Argentina and Peru.
Foreigners immediately began booking their flights to major U.S. cities when the White House announced that Covid-19 border restrictions for fully vaccinated international visitors would be lifted on November 8.
Brown Harris Stevens broker Martha Kramer noticed her phone buzzing with notifications, with clients overseas telling her they were eager to make an appointment to view New York City listings in person.
“These are people who are used to traveling, who are not used to being told you cannot travel to XYZ,” Kramer said. She compared the last year and a half for them to being in jail.
While some travel exemptions allowed visitors to the United States, many clients like his had gone almost two years without making physical visits, preferring to do business virtually, out of sight.
This was especially the case for those seeking to block purchases of primary residences, some brokers said. However, for investment properties and pied-à-terre, buyers preferred to wait. With the lifting of border restrictions, these buyers are expected to make large movements of money.
Charlie Attias, one of New York’s top Compass brokers, started preparing months ago for the wave of buyers he’s been waiting for. The dates he’s scheduled are unheard of at this time of year, when the city’s sales market typically slows down in the middle of the holiday season. Many of his clients come to see the advertisements between Christmas and New Years.
The arrival of international buyers comes as Manhattan’s residential sales market is on fire, with the third quarter being the busiest in decades. Even though activity picked up, supply remained higher than usual, so prices remained stable.
Stan Ponte, senior global real estate advisor at Sotheby’s International Realty in New York City, called the return of foreign buyers a “perfect puzzle piece” that could change that. They could absorb stocks and put pressure on prices to push them up.
If he does not have dozens of appointments scheduled in the coming weeks, the number (which he refused to specify) is enough for him to say that the influx has only just begun.
“We know this is happening and we are ahead,” said Ponte. “Each article talks about the overall economic impact of travel abroad. When these things happen, real estate happens.
Some brokers, on the other hand, have suggested that lifting travel restrictions would not change the fact that many serious buyers were already okay with buying homes virtually, said Hala Adra, a broker in one of the offices. from Compass to DC. Ongoing visa backlogs are also of concern, Hala said, adding that some clients have visa appointments delayed until 2022.
“For me, November 8 is [just] a date, ”Adra said. “We’re always going to see a delay of international people physically coming here, unless they’re here on a student visa, or it’s facilitated by the international organization they work for here. If they come alone, the meeting time at their local embassy is delayed.
In Los Angeles, brokers don’t expect a massive wave of international buyers, but expect activity to pick up, especially in the ultra-luxury market.
Unlike New York and Miami, the Los Angeles market has not been affected by a significant loss of international buyers in recent years, as most real estate is taken over by domestic clients, Ari said. Afshar, Compass broker.
Afshar said he was in discussions with international brokerage houses, but received “mixed signals” regarding expected buying activity in the United States.
“I think it will be a wait and see,” he said.
Stephen Shapiro, who runs Los Angeles-based luxury brokerage Westside Estates Agency, said he didn’t expect a massive influx of buyers because his clients have always been predominantly American.
“We are focusing on local buyers,” he said. “When an international buyer arrives, we are ready to serve them.
Los Angeles has never seen the same proportion of international buyers as New York or Miami, brokers agreed. Eastern time is generally preferable for Asian and European buyers, and South American investors have tended to look to Miami.
Still, high-net-worth overseas buyers have historically flocked to Los Angeles neighborhoods like Beverly Hills, Holmby Hills and Brentwood, and international buyers could come back to this high-end housing market.
Some brokers have already seen an increase in activity. Douglas Elliman has had wealthy buyers from Russia and Japan who have expressed interest in high-end properties in these neighborhoods, according to Stephen Kotler, who heads the brokerage’s operations on the west coast.
Compass broker Carl Gambino, who also operates in New York and Miami, agreed. He expects international buyers to start swarming LA’s ultra-luxury market this month.
While many foreign buyers have not been able to make it to the United States since last March, domestic buyers have taken over, particularly in states that include Florida and Texas. Now that could change.
“We’ve had basically an American market for the last five or six years. Everything has been red, white and blue, ”said Dora Puig, one of Miami Beach’s top luxury brokers. “I just think we’re going to have a tsunami of aliens in the market. I said to my team: “Expect”.