By the end of the year, Christian Bohyn, a Florida real estate agent, had stayed in his home country of Belgium for 10 months and was unable to return to the United States due to travel restrictions related to the coronavirus. His work visa expired during his travel abroad in March last year, and after the United States closed its borders to international travelers, it was impossible to obtain a new visa for non-emergency purposes.
Therefore, although his two agents (including his son Yan) have been doing business in the United States, Bohyn, CIPS, PMN (the broker owner of Windmaker Realty in Orlando, Florida) are trying to compete with Belgium, which is interested in Belgium. People make connections to invest in U.S. real estate. His goal is to have a new database of potential customers, once he returns to the United States, he can work with him. But he did not get the response he expected.
After an introduction to U.S. real estate at a trade show in Ghent, Belgium in October, “I walked over to me and said,’Hey, I know someone who owns real estate in the U.S. Can you sell it?’” Bonn said. He found that more people want to leave the US housing market than enter the market.
According to data from the National Association of Realtors®, even before the pandemic, the number of home purchases by foreign buyers in the United States has been steadily declining, falling between April 2017 and March 2020 46%. NAR data shows that in the 12 months leading up to March 2020 alone, purchases in the United States fell by 5% to 74 billion U.S. dollars.
What is the reason for the decline? Lawrence Cloud, chief economist at NAR, said that restrictive immigration and trade policies, coupled with the COVID-19 pandemic, have discouraged many international buyers. Although there is no foreign investment data for NAR during the pandemic, Yun said that 2020 will be another year of decline. “Many foreign buyers want to use their real estate in the United States. However, due to COVID-19 restrictions and the need to stay at home, the opportunity to buy a second home in the United States is limited,” he said.
Bohyn’s personal experience with foreign buyers also reflects this assessment. Five years ago, he sold a US investment or vacation property to European clients every month. This rate is reduced to approximately 1 transaction per quarter in 2019. “It’s zero now,” Bohyn said.
Asian buyers also seem to have lost confidence in US real estate. According to a survey conducted by the Chinese brokerage and investment group CSLA in November 2020, 82% of people said they do not plan to buy real estate overseas next year.
However, the market for foreign investors has not completely disappeared. NAR data shows that for the 12 months ending in March 2020, foreign buyers living in the United States and other countries still accounted for 4% of all home sales. In terms of sales volume, China, Canada, Mexico, India and Colombia were the largest sources of buyers during this period.
Since many real estate businesses are now virtual, it is much easier to establish contacts and establish business relationships. You can use your familiar technical tools (such as video conferencing and virtual performances) to attract international buyers and keep them informed of market changes. In many cases, checkout can be completed without having to sign in person. Yun is optimistic that the wider distribution of coronavirus vaccines will help to promote foreign transactions again.
He said: “In addition, the fall in the dollar will improve purchasing power.”
Trends to watch
Foreign buyers are adjusting their investment strategies to adapt to changing realities. Recently, this means that more and more people are buying real estate outside the United States. The following are some emerging trends that make US sales more challenging.
Holiday within driving distance. CIPS’ ABR, HBR’s Hanne Sagalowsky and Dallas’ Coldwell Banker Realty said many European buyers are looking for investment properties in other parts of Europe due to travel restrictions in the United States. Portugal, Spain and Italy are special destinations that attract investors. She added that to start, “people can drive to Spain-they don’t have to fly-so it’s easier to get there.” If you have international customers looking for houses in other countries, find properties that appeal to them. You can find out which houses on the market may meet their standards, and be prepared to help them when travel restrictions are lifted.
Student visa uncertainty. Real estate professionals working in university towns will have to pay attention to changes in immigration policies, which will affect international students and their families, which is the main source of foreign purchases. This is a huge market: According to the International Education Association, as of the 2019-20 school year, there are 1.08 million foreign students in the United States. This is a slight decrease from the nearly 1.1 million international students in the 2018-2019 academic year, but once the COVID-19 restrictions are lifted, the number may increase.
Stricter loan standards. Financing poses another challenge for foreign investors. Even under normal circumstances, lenders still believe that foreign investors are at higher risk. Veronica Seva-Gonzalez, a sales assistant at Compass in Arlington, Virginia, worked with Spanish-speaking clients and no agreement was reached in the early stages of the pandemic. Her South American buyers were unable to obtain loans, even though they tried two different banks, one in late March and the other in mid-April.
Latin buyers show interest
Floralba Nuñez, vice president of sales at ISG International Realty in Aventura, said that despite the disturbing environment for foreign investors, buyers in Latin America (many of whom consider the United States to be a safer place to live) are still optimistic about the United States. real estate. Fla. Nuñez is the liaison of President NAR to her native Colombia.
She said the political, social and economic turmoil in Colombia has prompted buyers to look outside the country for their primary residence. She said: “They know and hope that in the United States, whether in the short or long term, they can always rely on reliability to deal with the political and economic situation, so they can always enter and invest in the United States with confidence.
Nuñez serves 100 to 120 Colombian customers each year, and her business has dropped by about 90% during the travel restrictions from March 2020 to September 2020. She said that now that the flights between the United States and Colombia have resumed, the transportation and interest of people returning to the United States has resumed and increased by about 95% again. Some of the transactions she put on hold have restarted. She said: “Although the epidemic is not over yet, I know that people from Colombia and other Latin American countries with sufficient purchasing power are eager to use their financial resources in a stable country like the United States, whose economy and U.S. dollar are both strong.”
Think creatively about outreach
When working with international buyers, many of the tools you use to manage relationships remotely during a pandemic can provide you with good service. Nuñez relies on FaceTime to show properties to overseas clients. Since she was unable to visit Colombia recently, she has been appearing on Colombian TV shows through Zoom and other video platforms, and wrote a Spanish book called “Miami Alcant Todos”, which translates as “Every I personally like Miami”. “
Seva-Gonzalez (Seva-Gonzalez) pays more attention to video marketing and has used this epidemic as an opportunity to build a YouTube video library for international real estate investors. She said: “I think this is the best time.”
Sagalowsky said that although European buyers remain on the sidelines in investing in the United States, they will slowly return to the market. She said: “I think stability is the goal everyone is pursuing, so they won’t be surprised.”
If you find that the international business is developing slowly, please re-focus on helping domestic buyers with strong housing needs. Your expertise to help foreign buyers transfer across seas can benefit domestic buyers who transfer across the country.
Seva-Gonzalez can prove that she usually completes six foreign investment transactions per year, but only three in 2020. Still last year, this is the best performance since 2004, because she shifted her focus to helping a large number of people migrate from other places to her own community. US region. Last year her sales reached nearly 21.4 million U.S. dollars, and the annual record in 2004 was 19.4 million U.S. dollars. But she still has confidence in the needs of foreign investors. She said: “People think that the United States is a country full of opportunities and security, so I believe we will see [international] investors come back.”