Experts Expect Foreign Investment Will Lead U.S. Out Of Real Estate Slump
By Mark Moffa
“The U.S. is on sale right now.”
That’s how our real estate market looks to the rest of the world, according to David Michonski, CEO and chairman of Coldwell Banker Hunt Kennedy. He was speaking about international real estate at the Inman News Real Estate Connect conference in January in New York City.
Michonski and others at the event said buyers abroad are expressing a great deal of interest in the U.S. That interest may not be translating into lots of sales at the moment, but it is tangible and will help to lead the U.S. out of its housing crisis, the experts said.
“The global economic crisis has probably created some capital that’s looking for a safe haven,” said Alison Rogers, an agent in New York City who served as a moderator during the Inman News conference.
“Every time you come out of a downtown, the international involvement is stronger,” Michonski said. Specifically, he and others are looking at Miami and New York.
“These markets are going to be led out [of the downturn] by international buyers,” he said. “They have more confidence in us than U.S. buyers.”
Teresa King Kinney, CEO of the Realtor Association of Greater Miami and the Beaches, agreed, adding that she is seeing interest in her area from Russians, Venezualans and Brazilians. “[The U.S.] is still a stable market to a lot of those countries, compared to their own,” she said.
Stan Ponte, president of the Previews marketing division for Coldwell Banker Hunt Kennedy, said money is flowing toward the U.S. from the East. He noted that in addition to a recent influx of Turkish buyers, Russians are looking for trophy properties and investors from China and South Korea are in the market for usable, rentable properties. Sales have stalled in Mexico as well, he added, noting that this is driving pesos to the U.S.
“The world has become a very small place,” said Dottie Herman, president and CEO of Prudential Douglas Elliman. New York City, she said, is now the number one place for foreigners to buy, surpassing London. She sees Italians as one of the leading groups of foreign investors in the U.S.
But, despite the interest from abroad in U.S. “sale” prices, Herman said foreigners aren’t blindly jumping into the market. “They’re a bit more cautious right now. They’re more price sensitive than even a year ago,” she added.
Michonski said there is a 400-year history of foreign investment in the U.S., which increased significantly, he said, after 1989, when the Berlin Wall fell. “We have also been perceived as a safe haven,” he said. “We give foreigners bragging rights. They’re waiting, they’re looking, and they’re out there, and they’ll be back.”
