As discounts hit nearly 50% of properties sold, international buyers are capitalizing on bargain US real estate. Investors shifting from stocks to real estate could help revitalize metro markets from East to West, and even in cities like Las Vegas and Phoenix. This article has been republished from Property Wire for more on this.
Sellers are cutting the asking price on almost half the properties for sale in the US in 26 markets and particularly in Florida, research shows.
One result is that real estate investors from Europe, South America, Asia, Russia and the Middle East are finding bargains.
The price cuts on 47.8% of the housing inventory tell just part of the story, according to California based online real estate brockerage ZipRealty. It says 25% more prices are being cut than a year ago and the properties that are discounted have had their price slashed at least twice.
The median reduction amount was $19,165, or 7.25% of the listing price and the heaviest discounts are in Florida. Miami sellers have cut prices by 12% on average, the highest discounts of any market. Double digit discounts are also found in Jacksonville and Orlando.
‘The summer home selling season never kicked in this year, leading anxious sellers to slash prices,’ according to ZipRealty.
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The bargain prices in Florida are attracting a large number of overseas buyers who have always been high in the state. Many are buying condos and renting them out until the real estate market recovers, according to experts.
The foreign bargain trend accounts for less than 10% of US home sales, but experts say it is spreading fast. Real estate agents are now specifically marketing to foreign buyers and are hosting special trips.
One example is The Viceroy, an upmarket condominium complex in downtown Miami. Since January, 262 of the Viceroy’s 372 units have sold of which almost 90% have been bought by foreigners paying in cash for properties that are 52% cheaper than the peak of the market in 2007. Then units sold for $670 per square foot, now it is $319.
Individual investors from Argentina, Canada, Colombia, France, Israel, Italy, Norway and Venezuela have all been buying in Florida.
‘I have never seen such a high concentration of foreign nationals acquiring real estate. Some 80% of the sales in downtown Miami are foreign based. This is unprecedented,’ said Peter Zalewski, of consulting and brokerage firm Condo Vultures.
Other hotspots for foreign buyers include Washington, New York, Las Vegas, Los Angeles and San Francisco. In Seattle, Asians are buying properties without viewing and in New York some 25% of buyers at the Armani-designed 20 Pine building, near the World Trade Center site, are from overseas.
In Phoenix there has been growing interest from Canadian buyers. With the Canadian dollar approaching parity with its US counterpart, the prices are deemed highly affordable.
Along with the increase in foreign interest is an increase in those willing to help buyers who want to buy unseen. These include property search companies, letting agents and even those that will chase tenants if they don’t pay.
According to the National Association of Realtors some 28% of brokers have worked with at least one international client, up from 23% a year ago. Among those, 18% had completed at least one sale, compared with 12% in 2009.
Many tell real estate agents that they would normally invest in the stock market but see property has a better medium to long term bet.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.