Declining Dollar Draws Foreign Investors

MSNBC recently quoted Arthur Wong who runs a Canadian based U.S. Real Estate fund as saying, “This could be a once-in-a-generation opportunity for real estate investment.” The artilce went on to state that Buyers from countries like Brazil, France, and the Netherlands with strong currencies are spending millions on condominiums in Florida, New York and Las Vegas.

Foreign Investment in Florida.

“As part of our global asset allocation, we are targeting Florida as one of the areas with the most potential to recover value on the residential side,” said Shlomo Cohen,  vice president of real estate for Dizengoff-Trading Group which just completed the purchase of 115 condo units in Palm Beach.  The same Isreali based company completed the purchase of 118 condos in Jensen Beach in September.

The weak dollar and market which by many accounts has reached bottom is fueling a flurry of investment is Florida.  I see many great deals here in our Sarasota/Bradenton market and are working on many purchases with foreign investors.  Now is the time to back into the market.

German Real Estate Buyers

We may soon see an increase in the number of real estate purchases from German buyers.  The Ifo institute in Munich reports that a survey of 7,000 business executives indicates a rise  the German business climate index which now stands at 91.9.  The index, up from 91.3 is now at it’s highest since last September.  The German government is predicting economic growth of 1.2 percent in 2010.  With economies improving in Germany and our weak dollar we are sure to see more Germans in Florida this season.

Mortage Rates Near Lowest

The thirty year fixed-rate mortgages have dipped to nearly the lowest level on record. The fixed-rate is currently at 4.87 percent which is just above the record low of 4.82 percent. Similarly, the 15 year rates is now at 4.33 percent. Rates like these should encourage many to enter the market. International buyers should be intrigued by low prices, low rates and our weak dollar.

The British Are Comming!

Consumer confidence is up in the UK. The rating is now at the highest levels seen in the past three years. Also the legislature there has pledged to limit public spending as their economy improves. The British are known for a much higher savings rate than Americans and are generally in a better position to purchase properties at times like these. I recently sold a golf course condo to a British couple who paid cash. They tell me that many of thier countryman will be making investments here as their economy rebounds.

Heritage Oaks Condominium – Pending

Today one of our listings at Heritage Oaks Golf & Country Club went under contract. The cash buyer comes from the U.K.  and as with all of our European clients we will monitor the exchange rates to help them determine the best time to transfer funds to complete the transaction. The exchange rate was at 1.64 this afternoon. Golf condominiums like this are excellent choices for Europeans that holiday in the summer as they can rent the properties for peak winter season rates to Americans and enjoy the off season time for their traditional summer holiday.  You can click here to see details about this property.

German Real Estate Buyers

We may soon see an increase in buyers from Germany. Recent economic reports in Germany indicate that their recession is coming to an end. With things looking up more Germans will have the confidence to take advantage of great deals in our Florida real estate markets. We are using our large Internet presence to capture foreign buyers.

Foreign Exchange and International Real Estate

Today, I had the opportunity to speak with Jordan Tilley of Money Corp, a company that has served the needs of international clients by providing very attractive rates in monetary exchange since 1979.  With Money Corp., international buyers can lock in their rate of exchange prior to completion of  an international real estate transaction.  This eliminates the possibility of risk due to declining rates of exchange.  International buyers can even lock in their rate of exchange for each of the first 24 monthly mortgage payments after a purchase is made.  Give us a call at 941-650-4626 for more information how we can help you make the most of your money in your next international real estate transaction.

• Click here for more information and current currency exchange rates.

British Real Estate Purchasers

Over the past few years our real estate market has been bouyed by international purchasers with strong currencies. This trend has moderated as foreign markets have also experienced market declines.  With current statistic pointing to a slowing in the rate of reductions in UK home values we may soon see an increased interest among British buyers with improving confidence in their domestic housing market.  Home prices in the UK fell 6.4% in each of  the last three months of 2008.  In the first three months of 2009 values fell an average of 3.8%.  Additional good news in UK comes from a slowdown in falling manufacturing output which saw a decline of only 0.1% in March, the smallest monthly decline in the past 13 months.

Forclosures in United Kingdom

Forclosures in the United Kingdom have increased by as much as 54%.

Foreign National Lending

Recent changes in lending practices have added some complexity to the loan process for foreign nationals.  It is important for any foreign buyer desiring to purchase Florida Real Estate to work with professional brokers who are familiar with the process.  Because banking institutions have been caught with so many bad loans they have raised the minimum down payments requirements to 30 percent in most cases.  Additionally, down payments and closing costs are now required to be “seasoned” or deposited in the lenders bank for a 30 days prior to close of the loan.  Additionally, escrow accounts for taxes and insurance are now mandated by the Treasury Department under the HOEPA statutes passed this July.

New Mall on University Parkway

Recently the Benderson Group and it’s partners have received final approval to pull permits on the construction of their new mall on University Parkway.  The mall to be called the University Town Center will be modeled after the Mall at Millenia in Orlando.  The developers expect that at least 70% of the retailers in the mall will be new to the Sarasota area which they say has been undeserved by the luxury retail segment. Currently shoppers in our are have to travel to Tampa or Naples to shopp at a Tiffany’s or Neiman Marcus.  Additional retailers will include the likes of Pac Sun, Talbots, Abercrombie & Fitch, Jimmy Choo, Louis Vuitton, Cartier, Chanel and Vilebrquin.  Soon locals and international travelers will be able to enjoy such stores right here in Sarasota.  Such high end retailers will be good for our area and will attract more international visitors to our town.  According to Visit Florida, shopping ranks as the highest priority among international travelers while only fifth in importance among domestic tourists.  This is one of the reasons the mall’s developers are bullish on the project despite the current economic climate.  They have indicated that they will pay for the project from their own funds if favorable financing terms are not procured.

Foreign Buyers for Florida Real Estate

Florida annually attracts 15% of the international real estate buyers.  Of the four US states attracting the most foreign investment, Florida garners 25.4% while California receives 8.9%, Arizona receives8.7% and Texas, 6.8%.  The number of foreign investment in Florida real estate is sure to increase.  Warren Buffet predicts that U.S. assets owned by foreigners will grow to $11 trillion over the next 10 years.

Sarasota & International Real Estate

This past Wednesday the Sarasota area looked even more attractive to European buyers whose burgeoning buying power rose to a record exchange of  $1.5057 to 1 Euro.  Similarly the British pound rose to nearly $2 this past Wednesday on speculation that the Fed will once again lower interest rates.  I am currently working with European buyers who have expressed their intention to take advantage of the current weak dollar.  These buyers are not buying on speculation but rather looking at Florida as a vacation residence and an alternative to rising cost of waterfront properties on the Mediterranean.  One can surmise that at some point in the future our real estate market will again rise in value and similarly the dollar will also.  At such a time current buyers will earn a double dividend in increased real estate value and upon selling and converting back to Euros.

Seeing this as an important market trend, Corneau & Associates International Realty has strategies in place to reach foreign buyers.

International Real Estate; Russia

Now that I have returned from my trip to St. Petersburg Russia, I have had many requests for pictures of the trip.  So here they are. 

St. Petersburg is a beautiful city.  The people there are very friendly and very polite.  I made many new friends and relationships there.  I met many people there would had been to Florida.  Not surprising among those many had been to Miami and Palm Beach.  I met one man who was not particularly impressed with North Port. 

The Main Road that runs through the city is Nevsky Prospect and no unlike parts of Sarasota the new high end retail is pushing out the older small stores.  Though the average citizen of St. Petersburg earns about $900.oo per month there is an emerging wealthy class in Russia and especially in St. Petersburg.

International Real Estate, Russia

I will be in St. Petersburg, Russia this week from Jan 22 to the 29th.  I hope to make many new contacts and business referral arrangements for Sarasota buyers.

Foreign Investment

The British pound is particularly strong, currently trading at over two to one against the dollar.  This means that foreign private investors and investment groups are highly motivated to buy.  The rich are taking this opportunity to become richer.  I hear it every day,  “If I had the money, I would buy all I can.”  With such favorable exchange rates, foreign investors have the money.  Foreign investors often use a group strategy when they acquire properties, pooling buying power and distributing risk. They buy multiple properties in targeted areas, then hire local property managers to oversee them and keep them rented.  Canadians are very active right now, especially in area like Sarasota, FL where there are strong indicators that the market is in recovery. The British are very familiar with Florida as a vacation spot, so when they see bargains they are quick to seize the opportunity to purchase.  My high search engine ranking and highly trafficked websites like www.sarasotacondomiums.com are reaching these foreign investors.  I am also providing property management services.  If you are buy or selling in this market, I can help.

Foreign investment in Florida Real Estate

Foreign investors have poured more than $120 million into Central Florida real estate from January through June of this year, on everything from student housing to downtown office space, a new report shows. That makes the Orlando area the 19th-largest market for foreign investment in the United States and the largest in Florida.

Costa Rica Real Estate

There are so many coastlines in Costa Rica that it goes without saying that properties with an ocean view are plentiful. Land is much cheaper in Costa Rica than in other parts of America, so many people are vying to get their piece of paradise. With real estate still at about levels 70% less than in the United States, it is no wonder why so many investors are turning their attention toward this land. And because of the capital growth potential and due to the minimal tax consequences, it has also become an ideal place for people to make their second homes.   Through my affiliation with RE/MAX I can offer connections with the best agents in Costa Rica.  If you have interest in Costa Rica or other foreign markets I help you find a knowledgeable agent with a long history of dealing with American investors.

Rates, Inflation and the Dollar

This past Friday the Dollar reached a two month high against the Yen while at the same inflation data indicated very moderate inflation.  These indicators along with others indicating a slowing economy may increase the likelihood that the Federal Reserve may lower rates to keep the economy moving ahead.  in recent months the Fed has kept the rate the same indicating a change in trend from the earlier 17 consecutive rate increases.  Though the rates are still low, the housing market has slowed on fears of rising rates.