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Miami and New York agents expect deluge of international buyers
The gates are opening, and residential agents in major U.S. markets such as New York and Miami are preparing for a resurgence of foreign buyers.
Prospective buyers who have been sitting on the sidelines since the pandemic began last year are setting up appointments with their agents in the U.S. now that the travel ban has been lifted on Monday for 33 countries, including some in the European Union, the United Kingdom, China, Canada, Mexico, Brazil and India.
Foreign purchases of U.S. homes plummeted from April 2020 to March 2021, according to the National Association of Realtors, down 27 percent to $54.4 billion, compared to the previous year.
While those buyers were absent, housing prices skyrocketed and inventory fell to record lows in some cities.
Broker Enzo Rosani, a partner with Barnes International in Miami who works primarily with European clients, said his buyers are coming to South Florida “all at once” now that the ban has lifted. He’s been preparing for them by finding them short-term rentals and setting up showings and appointments at sales centers. His clients are looking at condos priced from about $700,000 to $2 million and up.
Supply is a problem, especially as Miami enters its high season. In South Florida, single-family home sales have soared over the past year and a half, with many locals now priced out of the market and opting for condos.
“The market is super intense and inventory is low,” Rosani said, citing a heightening of bidding wars. He’s been setting up as many showings as possible to give his clients options. “Europeans hate [bidding wars]. As soon as they feel rushed, it’s a turnoff.”
Craig Studnicky, broker and CEO of International Sales Group in South Florida, said “every single Realtor” in the region has been hearing from their international clients, particularly from Canada, Colombia and Peru.
“I think they’re going to be mostly disappointed with the lack of supply of houses,” Studnicky said. “There’s just not that much to buy, so they’re going to be highly frustrated with that reality. But there are condos to buy.”
Brokers have also been traveling outside the U.S. to showcase new condo developments.
Edgardo Defortuna, president and CEO of the Miami-based brokerage and development firm Fortune International Group, said his agents have been traveling to promote preconstruction projects in Mexico, Chile, Argentina and Peru.
Foreigners immediately began booking their flights to major U.S. cities when the White House announced the Covid-19 border restrictions for fully vaccinated international visitors would be lifted Nov. 8.
Brown Harris Stevens broker Martha Kramer noticed her phone buzzing with notifications, her clients abroad telling her they were eager to set up appointments to view New York City listings in person.
“These are people who are used to traveling, who are not used to being told you cannot travel to XYZ,” Kramer said. She likened the last year and a half, for them, to being in a prison.
While some travel exemptions allowed visitors to the U.S., many clients like hers had gone nearly two years without physically touring listings, opting instead to make deals virtually, sight unseen.
That was especially the case for those looking to lock down purchases of primary residences, some brokers said. Yet, when it came to investment properties and pieds-à-terre, buyers preferred to wait. With border restrictions now lifted, it’s expected that those buyers will be making major money moves.
The arrival of international buyers comes as the Manhattan residential sales market is on fire, with the third quarter the busiest in decades. Though activity accelerated, supply remained higher than usual, so prices held steady.
Stan Ponte, Sotheby’s International Realty’s senior global real estate advisor in New York, called the return of foreign buyers the “perfect puzzle piece” that could change that. They could soak up inventory and put pressure on prices to drive them upward.
While he doesn’t have dozens of appointments scheduled in the next few weeks, the number (which he declined to specify) is enough for him to say that the influx is only beginning.
“We know it’s happening, and we’re ahead of it,” Ponte said. “Every article is talking about the overall economic impact of foreign travel. When those things are happening, real estate happens.”
While many foreign buyers weren’t able to travel to the U.S. since last March, domestic buyers took over, especially in states that include Florida and Texas. That could now change.
“We have had essentially an American market for the past five, six years. It has been red, white and blue all the way,” said Dora Puig, a top luxury broker in Miami Beach. “I just think we’re going to get a tsunami of foreigners coming to the market. I told my team, ‘brace yourselves.’”