Gordon Brown, the British prime minister, may have been cold toward President George Bush at Camp
David, but that didn’t prevent him from warming up to real estate farther north on Cape Cod. Recently, Brown snapped up a vacation home of his own in Chatham, where he often spends his summer vacations.
Brown may be this season’s most high-profile foreign purchaser of a vacation home in the U.S., but he’s certainly not the only one. Numerous articles have noted how a weakening dollar has kept Manhattan’s real estate market buoyant by stimulating purchases by wealthy foreigners.
A survey from the National Association of Realtors (NAR), as well as widespread anecdotal evidence from brokers, suggests that the same phenomenon is also very much alive in traditional vacation home markets.
“Particularly in Florida, Texas and the Northeast, foreigners are buying vacation homes in numbers,” said Walter Molony, a spokesman for the National Association of Realtors.
A recent survey by the NAR noted that while all real estate is local, not all buyers are. Among international clients, the top five countries of origin are Mexico (13 percent of all foreign buyers), the United Kingdom (12 percent), Canada (11 percent), India (6 percent) and China (5 percent).
The median price of a home purchased was $299,500, significantly higher than the median price of $221,000 paid by U.S. homebuyers.
The NAR survey also sheds light on which states are seeing the biggest influx of foreign buyers. Florida leads with 26 percent
of all international transactions, followed by California (16 percent), Texas (10 percent), Arizona (6 percent) and New York (4 percent).
“We’re seeing wealthy people from Spain, Italy, Switzerland, China, South America, even Turkey, all over the Hamptons,” said Gary DePersia, senior vice president of the Corcoran Group. Of course, the Brits are there, too. “I sold a house to Heather Mills [the estranged wife of former Beatle Paul McCartney] in East Hampton just this summer,” DePersia noted.
Brokers in Aspen, Colo., and Jackson Hole, Wyo., said the market for vacation homes in both towns remains exceptionally strong. Indeed, brokers say their resorts will set real estate sales records this year.
“From mid-December until February, the Aspen airport is so stockpiled with jets, it looks like an air-show,” said Kent Schuler, an owner of Aspen Real Estate, a local brokerage. “Besides wealthy Americans, we get a lot of Germans, Austrians and Swiss.”
The obvious explanation for the surge in foreign buyers is the steep decline of the dollar, which increases the purchasing
power of many foreigners. But it is not the only reason.
Brokers said that some foreigners are buying into the U.S. market because they like the atmosphere created by the Republican administration.
“One reason foreigners are buying here is because they say they feel safe in America,” said DePersia.
While many international buyers use vacation homes for just that, the NAR survey sketches a few other motivations for their purchases. About 22 percent buy vacation homes as an investment. Since U.S. visa rules allow most foreigners to only spend six months out of every year in the country, 31 percent use their properties at least in part to earn a rental income.
Agents said that the surging interest of foreigners in U.S. vacation homes is changing the way brokering gets done. For instance, ads for vacation homes in the U.S. are being placed in magazines throughout Europe. High-end companies like Sotheby’s International Realty, for example, have been carrying out vigorous global marketing pushes, sometimes visiting foreign countries to find foreign buyers.
“I think our brokers [here in America] are the pioneers in doing a very unique type of marketing and selling of residential real estate,” said Ellie Johnson, vice president and brokerage manager at Sotheby’s International Realty in Manhattan. “They travel to the countries and destinations of where our clients come from. We will travel to where our clients are.”