That timeless belief, “all real estate is local,” is so ingrained in the minds of most practitioners that eyes often glaze over when the topic of global real estate is brought up. But Leading Real Estate Companies of the World® has been taking an alternative view since the early 2000s, when it actively began expanding to other countries from its strong U.S. base.
“Real estate isn’t local or global,” says LeadingRE President/CEO Pam O’Connor. “It is both. Those who ignore the global piece are missing enormous opportunities.”
Recently, LeadingRE brought on its own chief economist to share insights on the global economy and how it impacts real estate. Dr. Marci Rossell, whose background includes stints with the Federal Reserve Bank, Oppenheimer Funds and as chief economist for CNBC, believes that real estate is only beginning to feel the effects of globalization.
“Globalization is still a strong force in real estate, despite the recent rise of economic nationalism worldwide,” says Rossell. “The factors that drive real estate buyers to one area of the world—things like safe political environments, cultural and family ties, the supply of talent—are still in place. And while a stronger dollar makes U.S. real estate more expensive for foreign buyers, these other forces are a powerful counterbalance to that trend. Globalization may be under threat, but it represents an international integration arising from economic, cultural and political factors. It is here to stay.”
The iPhone has had a lot to do with this. Introduced in June 2007—less than 10 years ago—it has unleashed a new era of innovation, made the internet and global communication accessible to the masses, and further eroded cultural differences. The world population as of August 2016 is 7.4 billion people, and the median age is 30.1 years old. This is the iPhone generation, and we can only expect more global integration in the future as a result.
But if you’re sitting in Omaha or Cincinnati or Atlanta, you may still be asking, “What does this have to do with real estate in my market? We don’t have a lot of international buyers.”
In 2015, NAR reported that foreign buyers purchased 214,885 residential properties from April 2015 to March 2016, a 3 percent increase over the prior year. While most of that has been in coastal markets like San Francisco, Los Angeles, Seattle, New York and Miami, many Chinese have purchased in college towns across the country based on where their children are studying. In any market, there is likely more international activity than you think. Individuals from other countries often gravitate to the same real estate agents who have worked with their friends and family or financial advisors and have thus established a foundation of trust. You could be missing out on international business in your town or city simply because you are underestimating the potential business and have not focused on it.
Even if you have few foreign buyers in your market, no one can ignore the changing demographics in this country in virtually every state and region, represented by …read more
From:: Real Estate News