June 22nd, 2011, By Don Catalano
We don’t really comment on the residential housing market because we deal in commercial real estate. However, there is something interesting afoot in the residential real estate world.
Foreign investors have sensed opportunity in the falling home prices that have been plaguing the US economy. Last year, $41 billion was put into US residential real estate from foreigners. There has been a definite surge this spring as pressure on home prices makes bargains for oversea buyers.
What is the appeal? Foreigners can work here and be close to the city, but still feel like they are on vacation. Sounds nice to me.
Top buyers come from:
And their top interests are in:
Prices have been down 30-40% from the peak. Additionally, the weakness of the dollar gives foreign investors even more incentive to buy- with another 20-25% off. Foreign investors also tend to use cash, something US buyers lack.
Here’s something interesting: Prices in Miami (especially condos) are beginning to recover from foreign buyers so much that the foreigners are beating out the Americans.
But there is a lesson to be learned from our friends overseas. Foreigners are more concerned about getting value for their money than about the prices dropping. They are able to have a long term view that the US apparently lacks.
It’s true that short term, we may lose a little on paper. However, there could be a great long term gain. Do WE need to learn to be more optimistic???
Read more at CNBC