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Soft US Real Estate Market and Weak US Dollar Means Great Potential for Foreign Investors
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Added: 10/17/2006
Type: Summary
Viewed: 482 time(s)
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Soft US Real Estate Market and Weak US Dollar Means Great Potential for Foreign Investors
Foreign buyers are taking advantage of the soft US real estate market and weak US dollar to snap up holiday homes and investment properties in some of America’s premier resort areas, including Florida and New Hampshire’s White Mountains.
According to Pete Pietz, a US real estate agent with Badger Realty in North Conway, New Hampshire, who specializes in working with international clients, "My phone has been very busy with buyers from the UK, Bermuda and Scotland interested in purchasing investment properties and holiday homes here. A lot of this interest is being driven by the soft market and weak dollar, but there are other factors, too. Like their American counterparts, foreign baby-boomers are looking for ways to maximize their return on investments as they approach retirement, and so are purchasing second homes."
A National Association of REALTORS® survey of home purchases in Florida has shown that 15 percent of all home sales in that state were to international clients. While such a level of foreign-purchasing activity is not as high in New Hampshire, the White Mountains has seen a sharp increase in real estate purchases by international buyers in the past several years.
Pietz explains why: "These international buyers know it’s a buyer’s market in the US right now—there are a lot of properties available and fewer US buyers. I’m working with clients who are purchasing their second property with me. We also have referrals from prior customers and new clients who have found us through our website, www.badgerrealty.com, which includes a special section for international buyers."
While Florida, particularly the Orlando area, is a popular choice with international buyers, Pietz says his clients tell him that it makes more sense to buy in a year-round vacation destination. The Mt. Washington Valley and western Maine—the area around North Conway where his firm is located—offers skiing in winter, family theme parks and mountain recreation in spring, summer and fall, some of the most beautiful fall foliage in New England, and tax-free shopping at over 200 stores and outlets. With all it offers, the area still has a small town feel.
"I think every international buyer I’ve worked with has commented on how friendly and upbeat everyone is here—and how uncrowded the area is, especially given its popularity. Skiers in particular tell me the lift lines here are so much shorter than any other resort they’ve ever skied," says Pietz. Accessibility is also a factor. Pietz continues: "London to Boston flights, for example, average just 6 1/2 hours whereas flights to Orlando are usually a minimum of 11 hours. Add to that the many airline specials and it’s easy to see why this area is becoming an international community."
Unlike Florida, where the rental market is largely seasonal and driven by ‘snowbirds’ who flock to the state in winter, in New Hampshire’s White Mountains there is a strong market for rental properties year round. This gives buyers greater flexibility in choosing when to use and when to rent their property. The strong rental/second home market also has resulted in a proliferation of professional property managers and rental agents, making property ownership and rental easy.
FINANCING OPTIONS OPEN UP US REAL ESTATE MARKET TO INTERNATIONAL BUYERS
Previously a stumbling block for some international buyers was the perception that it is difficult—if not impossible—to obtain financing. As a result, many purchases in the past were cash sales.
Badger Realty’s managing partner, Brenda Leavitt, says her agency has worked hard to develop relationships with mortgage lenders who are experienced in working with foreign nationals. "For instance, we’re working closely with the local office of Simons & Leoni Home Loans. A Florida-based firm, they have special financing for foreign national buyers that offer up to 75% of the purchase price, with or without income verification. Their streamlined underwriting process focuses on finding the right package for the borrower with the level of documentation that the buyer is comfortable with."
Leavitt highlights the importance of working with those experienced in this type of transaction. "Buying property in the US is significantly different from buying in the UK and other European countries, for example. The purchase process is more direct, with less stress and more accountability; and we work collaboratively with the client’s solicitor. Our goal—and that of financing specialists like Simons & Leoni—is to make the whole process as easy as possible. Prospective buyers can view properties online on our website and save listings they’re interested in in an online portfolio."
Communication is key to the process, according to Leavitt. "We spend a lot of time communicating with buyers before they visit, so that we all have a clear picture of the type of property that’s right for them. We also provide them with information in advance of their visit so they understand the process and their options. That way they can make the best use of their time here—and we can ensure they have time to get to know and enjoy the area."
In many cases, buyers arrive for a three to five-day visit and sign a sales agreement before heading home. Leavitt, Pietz and the Badger Realty staff then handle every detail of the closing so that on their next visit, the buyers can enjoy their new home or investment property.
ABOUT BADGER REALTY
Since 1965, Badger Realty has been a leader in residential and commercial real estate in the Mt. Washington Valley, including North Conway, Jackson, Bartlett, Glen and Conway, New Hampshire, and in western Maine. www.badgerrealty.com. 1-603-356-5757.
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