The New York Times reported on November 6th that real estate agents around the country are ratcheting up their efforts to woo the Russian oligarchs, Korean industrialists and other international buyers who have been making headlines with splashy top-dollar purchases.
With the outreach of the Internet, it is much easier for a web savvy agent to get their properties in front of people from all over the world. In the last six months, Cornerstone Properties has tracked visitors to our website from over 81 countries worldwide. As global equity markets slow, we are seeing a different type of international buyer. In the last few years we would have helped a great deal of Brits, Canadians, and Germans (in Ft. Myers) buy second homes.
Over the last year, we're still seeing the Brits & the Canadians, but we're also seeing buyers from completely different areas of the world. Over the last two months, my client roster has included a Brit, a Canadian, an investor from Israel, a family from Venezuela, a doctor from Nigeria, and an Indian businessman. With the dollar gaining strength, you would figure that U.S. real estate would be less attractive and draw fewer international buyers. Not true. The international community still considers U.S real estate to be selling at a discount and their driving motivation to buy is because they see U.S real property as a safe haven for their money.
I know that I've mentioned it before, but over 24% of international buyers choose Florida as the place to buy and live. You can show me all the polls and all the indexes, but at the end of the day, the price of any investment is determined by supply and demand. At present, we have an ample supply of "used" homes. But, most of the luxury home builders have stopped building inventory. They simply cannot build a custom home and make a profit at current pricing. We will start to see more competition for the nicer luxury homes. Inventories will fall and prices will rise. If the equity markets remain unstable, people from all over the U.S. and the world will be looking for different investment vehicles for their money. Florida Real Estate is the ultimate investment vehicle. Keep in mind that prices have roughly doubled in the past 5 years, so even with a 40% drop, we'd still be up about 20% from 2003.
Steve Eckhardt, President
Cornerstone Properties & Investments, Inc.
