Global buyers still salivate over U.S. real estate
By Jessica Swesey, Monday, January 28, 2008.Bookmarking Sites
While Americans' own appetite for U.S. real estate is suppressed in many markets and market segments at the moment, global investors' appetite is growing for properties in the U.S., where their foreign money often can go a lot further.
U.S. real estate has risen to the top of the global property market among foreign investors, with New York City and Washington, D.C., named the top two global cities for foreign investors' real estate dollars, according to a recent survey from the Association of Foreign Investors in Real Estate.
Other cities in the top five in terms of foreign real estate investment were: London, Paris and Shanghai.
Global investors are also increasing their interest in China, according to the survey, with the gap between China and the U.S. narrowing.
According to AFIRE, a dramatic change occurred in the latest annual survey that showed a total reversal of investors' preferred U.S. property types, with every property category shifting. The top U.S. property types in order were: retail, hotels, industrial, multifamily, and office.
The top U.S. cities for foreign investment after New York and D.C., were Los Angeles, San Francisco and Seattle.
And despite the much talked about credit crunch and subprime mortgage crisis in the U.S., AFIRE says that on average, survey respondents said that slightly more than 50 percent of their real estate planned acquisitions in 2008 will be allocated to the U.S. That percentage is roughly the same as in 2007, but the dollar amount is expected to increase by 16 percent.
While it seems the weakening U.S. dollar has been timed with the uptick in foreign interest, 85 percent of AFIRE's survey respondents said that recent fluctuations in the dollar have not prompted them to increase their U.S. allocation.
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Submitted by Anonymous on January 29, 2008 - 12:00pm.
Jessica,
Thanks for the post. In resort type areas such as here in Montecito and Santa Barbara, we are also seeing a lot of foreign money come our way...mainly from Europe so far. I don't see this stopping anytime soon with the week dollar.
take care
Submitted by Anonymous on January 29, 2008 - 1:46pm.
In Portland it is India and the Chinese...We do not think of Red China as being a consumer for US Real Estate but is time to start. Many PHD's are here working in the Silicon Forest and on top of that many rich industrialist are here too.
Unrestricted by their governments these Chinese Robber Baron's are getting wealthy as our dollars pour overseas due to our Walmartized craze for all that is cheap!
They are going to start throwing their weight around and there are a lot of them. They seem to shopping for homes and small investments and some for land as well.
The buying activity is small but I can see it growing. Keep in mind they shop using all the traditional channels as well as so getting in front of them is not all that hard.
They are going to have an impact for many years to come.
Best wishes;
Dirk
Submitted by Anonymous on January 29, 2008 - 2:00pm.
One reason foreign investors are so warmly welcomed is that they are prepared to pay a little more than their U.S. counterparts, who, without the cushion of the weak dollar are wanting to see LTVs in the 40's & 50's. Foreign investors can go to the 60's and still get a great deal - which means a win-win in many cases. Ironically then, it may well be the forgeign money that eventually helps us out of the mess we're in.
Submitted by Anonymous on January 29, 2008 - 2:39pm.
The east coast is seeing more Canadians buying than ever. The strength of their dollar is buying more here than ever. The coastal areas of the Carolinas are also seeing many from Florida migating halfway home. There are 10,000 or more baby boomers retiring every month. That group in the frigid north are still migrating south too. Even with interest rates at this level we are in a buyers market, but not as bad in many parts of the country by a long shot.
Submitted by Anonymous on January 29, 2008 - 3:31pm.
This is simply a way to get the money back into the US...they are going to get screwed...especially Canadians. Alot of them think it's wise to come down and buy places in Palm Springs, etc....they're freakin crazy...or just have so much money that they don't care.
You couldn't PAY ME to live in Palm Springs...what a dump.