62 | THE VIEW FROM THE USA WORDS | John Howell
Domestic bliss? Nope T
raditionally real estate brokers and agents in the US have been focused on the massive domestic
market. With over 1 million Realtors™ on the register and perhaps over 2 million agents and brokers holding a licence it is just as well that the market is still huge. True, both numbers are well down from the peak in 2006, but it is still an awful lot of people to support. With the decline in the market since 2006, it is small wonder that more and more real estate agents have looked at the places where there is still a substantial demand from buyers and tried to grab some of the action. Others, far fewer, have realised that many of their existing clients and contacts have been quietly building up portfolios of property overseas without going anywhere near their US Realtor. In each case, they saw a business opportunity and, if there is one thing at which Americans are supremely talented, it is identifying and exploiting business opportunities.
Of course, in some parts of the US they are no strangers to the foreign buyer. Thousands have bought in Florida, New York, California etc. However, in other places they were a rarity.
It was, therefore, with great interest that we saw that the third and fi nal day of the Inman Connect Conference for Realtors, held last month in New York (see page 38) was devoted to the subject of international sales. Your plucky editor thought that this would be a great opportunity to speak to some of the delegates, a few of the presenters and some of the journalists present to see what they felt about the international real estate market in the US and what they were intending to do about it. The fi rst surprise was that this part of the event was sponsored by The Wall Street Journal. Deborah Falcone, Director of Real Estate Sales and Vertical Markets at The Wall Street Journal explained to OPP that their interest in this international market had grown hugely over the last year. They have seen the corner turned and they wish to support the industry and grow on the back of its revival. Sponsorship of this event was a demonstration of that desire. The interest in real
estate also refl ects the passion of their owner, Rupert Murdoch, who is very supportive of the venture. Needless to say, being The Wall Street Journal their focus is very much on up market real estate. The title of their real estate section is “Mansion.” There is not a lot in there for less than $2 million and many properties are much more expensive. The Wall Street Journal now itself (and via sister companies in China and the Far East) actively lists real estate to target the overseas buyer. This includes an operation targeting the Chinese
Now, normally, I would not start an article by citing the views of other journalists but when you are talking about publications of this calibre their views give a very strong steer as to the attitude of the market as a whole and the direction they see it moving. The major players in the US real
estate industry have made the same analysis and have come to the same conclusion: the foreign buyer is and will remain an important component in the US market. The National Association of Realtors (NAR) and the major brands such as Coldwell Banker, Sotheby’s and
per year. They are not niche businesses targeting a niche market.
Other and much smaller realtors, based in both the US and Canada seem to agree. For example, Richard Silver of Bosley Real Estate in Ontario, James Alexander of Alexander Real Estate in Virginia and Joe Parkinson of Aurora Real Estate in Austin, Texas all agreed that about 20% of their business was coming from foreign buyers. Other general realtors from Vancouver, San Francisco, Fort Worth, Manhattan and Miami agreed.
Of course, some had specifi cally
“Some parts of the US are no strangers to foreign buyers – but to some it is still a rarity”
targeted the foreign buyer and, for them, such buyers accounted for a much higher percentage of their business. For example, Tina Mak from Coldwell Banker in Vancouver seeks out Chinese clients and Maria Babaev, OPP’s correspondent based in Long Island, New York, actively seeks and services Russian buyers. Other realtors we spoke to focused on the UK, French and Italian markets. In these cases up to 60% of their business came from foreign buyers.
Comfort zone | Traditionally, Americans haven’t been great emigrators
market in the Mandarin language. Keeping a close eye on the opposition was Kevin Thomas, of The New York Times. He is their Director of Advertising for residential commercial real estate. The New York Times is particularly impressed by the activity being generated by the BRIC countries – Brazil, Russia, India (to a lesser extent) and China. The New York Times too, has just opened a Chinese language version of its real estate pages. Other journalists – and there were a lot there – echoed this thinking.
RE/MAX agreed. Budge Huskey, the CEO of Coldwell Banker told OPP that they have now established relationships with brokers in 51 countries “of the 750 $5 million plus homes listed on the Coldwell Banker Preview site (its site for premier properties: Ed.), 20% were sold to foreign buyers.” Dottie Herman, President of Prudential Douglas Elliman told us much the same thing. 20% of their brokerage business now involves foreign buyers. Now it is important to remember that these are major real estate brokerages, selling thousands of homes
One thing that many of these businesses shared is that they targeted the buyer of expensive properties. For example, Maria is really looking to sell homes at $10 million plus, and although she is happy to accommodate people with lower budgets you will not fi nd her dealing with people spending $200,000. Yet there were realtors who recognised that there was a market – and a potentially profi table market far lower down the price range. Budge Huskey told us “We focus on the ultra high end but, in reality, there is a lot more business at the lower level – say $150,000 - $200,000. There are lots of British buyers in the market at that level, particularly in Florida and the recent election results in Venezuela led to a huge infl ux of buyers in Miami. It is just that these lower priced properties are not as sexy.” But what about Americans buying
FEATURE
www.opp-connect.com | FEBRUARY 2013
In place of our regular interview, editor John Howell spent a couple of days talking to a select few American property professionals to get a wider view of what’s going on stateside. The answers? Mixed, as one would expect. But one interesting point stands out – brokers in the US are starting to look outside their borders
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