Saturday, January 19, 2013

Foreign Buyers are Here

One of the first axioms we teach in real estate is that all business is local. Meaning that watching national trends and basing future decisions on national headlines—when our business is local—is like comparing apples with oranges. This week brought lots of minor national reports but nothing to change the outlook. In general, nationally things are better, but not booming. And yet, here on the Suncoast, business is booming. The 12 percent spike in December housing starts (again, nationally) got more attention than it deserved -- a dead-of-winter month is not a good indicator – but it manages to push interest rates up a hair. Locally, it feels like 12 per cent is a low number.

For now inflation in the real estate markets seems under control, up only 1.7 percent in the whole of 2012. But again, spending income (free cash) has taken a hit with the new withholding taxes. So will that influence the willingness of Mr and Mrs Jones from Anytown, USA to move here—or at least to prepurchase a retirement home for use in the near future? Time will tell. The core hazard facing us all: how to get right the timing and magnitude of fiscal austerity before the Fed has to stop buying our debt. When that happens, the musical chairs game ends and we all know, if you don't have a chair, you're out. We may be making more accidental, near-term progress than we know, time will tell.

Having said all that, I have more business today than I have had in a couple of years. Clients are a mix of American, Canadian and Russian. Honestly, I have never marketed myself to Europeans, I'm not fluent in any language but English, I have a little high school Spanish that has served me well on vacation trips, but I could never say with a straight face that “Yo hablo Espanol”. So what's up with all these buyers being (as we say in New England) “from away”?

Well for one thing, fear. Either the economy of the world sucks more than ours does, and so their investment money is finding us a safe haven and their money is better invested here, or our economy sucks more than theirs and so the values are greater here. Either way, people are knocking at my listing's doors with cash. And they are anxious.

Over the last 25 years or so I have never felt good about writing a contract on a property which the prospective buyer has only seen once and not “slept on”. It's been my history that buyers who fall in love with a property after one viewing, fall out of love just as fast after the home inspection. Once the stars in their eyes clear, and they find reality rearing it's ugly face, they can't wait to cancel a contract. Not so today's European buyers. The decision to get a piece of Florida real estate is so strong that they will ALMOST buy from a photo. If the property they saw in the Multiple Listing is as nice as it's photos, just walking into the property one time is all it takes to confirm their decision. This would make for a really dull HGTV show. The people buy the first house. No drama and no worries. You could fit the whole show into 5 minutes. Too bad they're not all like that.

Dane Hahn is a real estate professional practicing in Charlotte and Sarasota Counties. You can reach him at or by phone at 941-681-0312. See him on the web at

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