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- Why Foreigners Buy in the U.S.
- Test Your Cultural IQ
- Globalize Your Web Side With One Link
- Yuan and Dollar No Longer Tied; Impact on U.S. Housing Market
- Housing Boom Not Just U.S. Phenomenom
- Guiding Investors about Foreign Markets
- Hispanic Buyers Break Traditional Patterns and Move to Follow Jobs
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To better understand international homebuyers, NAR, in conjunction with the Florida Association of REALTORS®, conducted a study in May of 2005, surveying REALTORS® in Florida about the sale of homes to foreigners. Survey results were based on 986 respondents who closed 1,844 home sale transactions in the preceding 12 months. Among other questions, the survey asked about the purpose for the purchase. Results indicate a nearly equal number bought a home for use as a vacation property (38%) or for investment/rental income (37%). Another 17% indicated a home was needed for a job in the U.S. Eight percent (8%) indicated they did not know the reason for the purchase. While the report focuses on home sales to foreign buyers in Florida, the results provide insights for markets throughout the United States. Print the 18-page "The 2005 Profile of International Home Buyers in Florida" report.
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How culturally savvy are you? Test your cultural knowledge with this online 20 question quiz. Make note of the questions and answers relevant to ethic groups in your community and then integrate information into marketing plans.
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The Internet has made us one very large, global community and real estate companies increasingly see the value of adding a global element to their web site, whether with translation options, currency converters or, information targeting specific groups. One fast and easy way to globalize your site is to add a link to www.WorldProperties.com. NAR is one of 25 national associations represented at this site, so in the U.S., only NAR members may use the broker services. Consumers can search for properties around the world from this site, and professionals can learn about industry business practices, locate a foreign broker for referrals, and download marketing tools. Graphics that prompt consumers to "Search International Real Estate Properties" can be downloaded from the "PR Tools" section of the Document Repository page (registration/log-in required), for use at company or agent web pages. Use these graphics to offer clients and customers access to global real estate by adding the graphic to your site and linking to www.WorldProperties.com.
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On July 21 China's central bank announced that it would no longer peg its currency (yuan) to the dollar. Although the immediate rise in the yuan against the dollar was small (2.1%), future increases are likely. If so, U.S. consumers will be impacted by rising prices of consumer goods. (The U.S. has a $162 billion trade deficit with China.) The U.S. housing market may also feel a direct impact. Some economists argue that China's currency move translates directly into higher mortgage rates for American homeowners, accelerating the end of the current real estate boom by pushing home prices lower. Why? The Chinese are major buyers in the Treasury market (China is the second-largest foreign holder of U.S. Treasury securities, with $243 billion at the end of May). In the absence of the yuan pegged to the dollar, there is less incentive to buy U.S. Treasury bills. Fewer buyers means lower prices and higher interest rates. Within minutes of the July 21 announcement, U.S. bond yields moved higher. Mortgage rates typically follow. Higher mortgage rates mean less buyers and the end of rising home prices. However, other economists note that China is on track to buy more securities than ever this year, and doubt the move will have a dramatic effect. Only time will tell, but real estate professionals are well-advised to watch this issue. Set up a Google Alert to receive a listing of daily news stories on the search terms of your choice.
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The housing boom is not just a U.S. phenomenon. Some European markets make the U.S. market look downright calm. The French have seen prices increases of 87% since 1997, versus 73% in the U.S. Real estate prices are up 154% in Britain, 145% in Spain and 192% in Ireland over the same period. Like in the U.S., low interest rates have driven these booms, and the European mortgage market now offers U.S.-style loans, making it easier for buyers to afford homes at rising prices. Not all countries are enjoying this market growth. German home prices are tied to the country's double-digit unemployment rate and depressed consumer confidence levels. And in Britain, prices have peaked and are beyond the reach of many buyers. Beginning this spring, the European housing market got an additional boost from American buyers who were enjoying a rally in the value of the dollar against the euro, resulting in Americans seeking investments and/or second homes abroad. Get current European national market information all in one source from the Royal Institution of Chartered Surveyors' 2005 European Housing Review. Download summaries or the full report for no charge.
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REALTORS® in the U.S. asked by clients for advice regarding foreign investments may feel at a loss for a way to assist a good client without offering unqualified investment advice. In the last quarter's 'Notes from the Chair' column in NAR's Global Perspectives newsletter, International Operations Committee Chair Carmela Ma, CIPS, shares her three secrets of investment to which she adheres for her clients and herself. They deal with the decision to only invest in markets that present a community free of war, starvation, corruption and mayhem. To help assess this, real estate professionals can refer to the annual Opacity Index, published by the Kurtzman Group. The Index measures the extent of how a country's corruption, economic policies, and poor government and business practices impact its business environment. In 2004, Finland, Denmark, Sweden were ranked as the top three countries; the U.S. ranked six on the list.
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Traditionally, Hispanics in the U.S. have tended to migrate to gateway cities in California, Texas, Illinois, New York and Florida. Recently released census data shows a change in this pattern, indicating that Hispanics are going to where the jobs are. Brookings Institution demographer, William Frey, said in a recent USA Today article that changing patterns mean they are just as likely to go to Iowa, South Carolina or Tennessee. Data estimates show that the share of Hispanics living in counties with large concentrations of Hispanics is slipping as job security/satisfaction increases in importance, perhaps over remaining in a tight-knit ethnic community. View the top 100 U.S. counties where Hispanics live. REALTORS® living in communities that are beginning to attract larger numbers of Hispanics residents can tap into this market by learning more about the Hispanic populations in the U.S. and developing a business plan to reach this market. For resources and training, visit NAR's diversity home page, or consider taking the NAR course: CIPS: The Americas and International Real Estate.
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Report compiled by NAR International Operations, narglobe@realtors.org.
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