Fewer foreign clients buying

Economic worries catch up with clients that condo brokers used to count on

Sep.September 01, 2008 10:22 PM

Foreign apartment buyers are disappearing from New York City. It’s
not the plot of a science fiction or horror film, but the influx of
foreigners taking advantage of the weak dollar has slowed down as the
dollar has started to rise.

In these uncertain economic times, it’s the foreign buyers that new
condominium developers count on, so a slowdown could foreshadow rougher
times ahead.

“I have fewer foreign clients recently, mainly because the
financing that was available to them has tightened and they, too, are a
bit tentative and selective,” said Deanna Kory, senior vice president
of the Corcoran Group. A “lack of good financing options and concerns
over the market” are putting off foreign buyers, she said.

Roseann Barber, also a senior vice president at Corcoran, said,
“Some foreign buyers are not pulling the trigger just yet as they feel
prices may come down even further as interest rates rise, inventories
swell and the dollar drops.” In the meantime, she added, they are
renting in the city.

Over the last few months, Darren Sukenik, executive vice president
of luxury sales at Prudential Douglas Elliman, said that the ratio of
buyers has shifted “from 60-40 foreign to 60-40 New Yorkers.” And, the
makeup of foreign buyers has changed.

As Europeans lose purchasing power, other nationalities are stepping up to take their places.

“All of the European countries, especially the United Kingdom, have
tightened their belts,” Sukenik said. “Emerging nations like Russia,
the Baltic region, China and India, on the other hand, are spending
like crazy.”

The New York Times reported in July that wealthy Russians have been buying
ultra-luxury properties in Manhattan.

Still, in an effort to reach out to potential foreign buyers,
developers and salespeople are kicking their efforts into high gear.

Century 21 NY Metro has stepped up its direct marketing and is
tapping into its national and global referral network for business,
said Jorden Tepper, executive director of sales at the company. Another
way the firm is trying to compensate for its faltering foreign
business: Sales agents and hybrid agents are approaching their rental
clients with incentives to become first-time home buyers.

One developer recently traveled to Italy with his marketing team to sell units.

“Due to the current national housing market we have been trying to
promote and advertise our product overseas, where the euro is
especially strong,” said Kevin Gorjian, managing director of marketing
and design for the Hakimian Organization, developer of 75 Wall Street.

A number of development executives, including Gorjian, said that
counter to some reports, there has been no falloff in foreign interest.

David Perry, director of sales at the Clarett Group, which is
conducting sales for Sky House at 11 East 29th Street, 200 West End
Avenue and Forte at 230 Ashland Place in Fort Greene, said last month:
“We’re not seeing any slowdown of foreign buyers and we have seen more
traffic and have done more deals in August than we did in July.
Desirable locations and better-quality buildings by reputable
developers have not been affected by the news reports of doom and
gloom.”

Some hold out hope that fear of the dollar’s recovery could prompt foreigners sitting on the sidelines to take the plunge.

“I am strictly working by referral and my buyers realize that the
U.S. dollar will eventually come back to a higher rate versus the euro,
so now might be the perfect time to own a piece of our beautiful city,”
said Fabienne Lecole, a vice president and associate broker at
Corcoran.


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