Posts Tagged ‘Intero Real Estate Services’

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Intero Insider: April Sales, Values Trending Up

By Gino Blefari | May 23rd, 2012 0 Comments

The latest housing numbers are out and the message is clear: Things are heating up in markets across the country once again, and the best news about this is the fact that it’s no longer just investors who are gobbling up properties. Now we’re seeing more demand and sales coming from primary residence buyers.

Sales of existing homes increased 3.4% to an annual rate of 4.62 million in April from March, and were up 10% from the same month a year ago, according to the latest numbers from the National Association of Realtors. The best part of this news is that home values also increased 10.1% to $177,400 in April. The increase in values may seem to hurt affordability, but in actuality it tends to spur more buyers who are on the fence to make a move while conditions are still great.

Buying conditions are still excellent for buyers. Average rates on the 30-year fixed-rate mortgage were 3.79%, according to Freddie Mac’s latest survey measuring the week ending May 17.

Not only are the numbers good – they’re showing strength in all the right places. A healthy market is one that sees sales and values increasing at a reasonable pace, and one that is not unevenly filled with distressed properties and investor buyers.

The share of sales that were foreclosed properties is slowly diminishing. Distressed homes, which include foreclosures and short sales that sell for deep discounts, accounted for 28% of April sales, with 17% being foreclosures and 11% being short sales. This was down from 29% in March and 37% in April a year ago. Foreclosures sold for an average discount of 21% below market value in April, according to NAR, while short sales sold at an average 14% below market value.

The share of buyers who were first-time purchasers increased to 35% in April, up from 33% in March, but down slightly from 36% in April last year. Meanwhile, investors purchased 20% of homes in April, down from 21% in March, and holding steady from 20% during the same month last year.

Depending on your market, you may be seeing a plethora of discount deals still out there, or multiple bid situations. NAR says this is because inventories are tight in some markets, notably the Washington, D.C., area, Miami; Naples, Fla.; North Dakota; Phoenix; Orange County, Calif.; and Seattle. Expect stronger price increases in most of these areas in the coming months.

All of this shows that to talk about the condition of the housing market right now, you really need to first define which segment you’re talking about: first-time buyers, foreclosures, city, state, neighborhood, etc. The market is moving in a few different directions, depending on where you’re looking. Overall, things are definitely trending up, but be sure to understand which segment you’re trying to assess before drawing any big conclusions.

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Mortgage That Matters: Remember The Eight Track Player?

By Rick Soukoulis | May 21st, 2012 0 Comments

It’s beginning to feel a bit like ground hog day. For the past five years it seems that the beginning of summer is marked by some huge event that causes turmoil in the world’s financial system. This year the Greeks are up to it again and the international accounting rules appear to be changing around how banks hold mortgage servicing…

Why do I watch these sorts of events? And what does it mean to us at a local level?

Well……. I have been saying for months now that the future of lending is the regional mortgage banker. Not the mega banks. Over the past few years, Chase, Bank of America, MetLife and others have either stopped lending in the mortgage market all together or have cut back on mortgage staff to bare bones. Given the pending new accounting standards, Wells Fargo, the only 800 lb gorilla left in the space, will have to curtail their aggressive approach to their mortgage business. The new rules will create a level playing field with mortgage bankers who will simply outperform the banks.

What does this mean to that old fashion thing call service?

A borrower called Bank of America Corp. in March to ask about refinancing the mortgage on his Oconomowoc, Wis., home, a saleswoman told him the company was “swamped with business” and that it would call him back in 60 to 90 days. 60 to 90 days? Really? I could be dead, divorced or unemployed by then.

As rates have fallen (they are currently at historical lows), many lenders, especially big banks, have not been able to or have not desired to hire staff to keep up with demand. It now takes the nation’s biggest mortgage lenders an average of more than 70 days to complete a refinance according to Accenture Credit Services, up from 45 days a year ago.

The result? Frustrated consumers who have to wait months to lower their payment and Banks who charge more for loans to slow business down enough for them to catch up. Based on FNMA’s historical pricing, mortgage rates should be around 0.50 percentage point lower . That gap is going straight into the big banks pockets. Where’s my bail out?

So let’s get this straight; the government is trying to encourage lenders to lend, the housing market is in desperate need of lower financing costs to sell houses and borrower’s budgets are in dire straits but banks are taking 70+ days to lower your rate and are charging a whole lot more for their terrible service. Their per loan revenue is higher than it’s been in decades.

How did this happen you ask? The nation’s four largest banks now account for 55% of all loan originations, up from 38% in 2004. This is the classic “He who has the gold” scenario that FNMA is seeking to reverse.

It looks something like this:

FNMA and FHLMC, the government sponsored entities that everyone loves to hate, has actually encouraged the trend of adding more approved lenders nationally and has been adding staff to review and process thousands of regional mortgage bank applications.

They know the future of mortgages looks more like a neighborhood lender than it does a huge national bank. Last year FNMA only had 400 lenders selling them loans out of the 1,100 approved seller/servicers. That 400 represented a tremendous amount of concentration or what we call “counter party risk”. You can only imagine the “he who has the gold” conversations that went on between FNMA and the likes of a Bank of America when it came to buying back a loan.

Today FNMA sees the homeowner being best served by thousands of lenders across the nation who can quickly scale up and down given rate movements and consumer demand. Local service, where customers could actually come in to meet with a human or make their payment has a strong allure for customers. Local lenders, who make or break their reputation in their own back yard everyday may find it a whole lot easier to do right by those same customers.

The massive leverage the big banks have wielded over the agencies and us borrowers for years is about to end rather abruptly. It is my prediction that 24 to 36 months from now, entrusting one of the “Big Four Banks” with your mortgage loan will be a little like having an 8-track player in your car and a phone that you carry around in a suitcase.

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Luxury Insider: Luxury Property Buyers Are (and should be) Hard To Please

By Alain Pinel | May 17th, 2012 0 Comments

Can’t wait for May 18th, a.k.a. “Facebook Day”! Two more days to speculate on how much the IPO is going to raise and what will be the valuation of the company, both Guinness Book of Records instant new entries. Of course my main interest lies somewhere else: what are the top employees, the “lottery winners”, going to do with their millions? To tell you the truth, I already know the answer, and so do you.  We have been there before.  The new millionaires will buy million dollar homes. Simple as that. You and I would do the same, right?

The second question, even more interesting to me, goes as follows: who are they going to trust with their home search and the negotiation? What brokerage firms? What agents? Why?

Last year, Luxury Portfolio, our partner for international marketing, released a White Paper on the subject, titled a mouth full: “How Today’s Highly Affluent U.S. Consumer Selects Luxury Real Estate Associates and Brokerages”.  Reading it is always an education as 5 years of recession changed consumers’ mindsets, motivations, expectations and market sensibilities. Today’s luxury buyers and sellers know the difference between acts and empty promises, between the brokers who can deliver and those who wish they could, although they are not sharing the scoop with their clients.

Because, as the study suggests, high net worth individuals are savvy and used to conducting their own research online on domestic and international markets, agents must be able to serve as a resource by having both a global perspective and an even greater store of research and information at their fingertips. Few do. Few can. That goes especially for service, which is predicated on the brokerage’ and the agent’s ability to market globally high-end properties in high-end ways.

The wealthy, today, want to feel that they have made an instant profit the day they close on a purchase. And they know what they are talking about. The access to internet research has empowered them to access information which previously resided only with the professionals. The luxury market is not to be confused with all other price segments. Six out of ten consumers say that an agent who specializes in high-end real estate is important to them. They want their agent to be affiliated with a strong organization and network. Intero, through Luxury Portfolio International’s website, helps its agents meet this criterion as about 85% of the property listings from all over the globe are priced over $1M.

According to the White Paper, internet presence, high visibility print and reporting tools are key. 71% of the affluent consumers say that it is critical for their listings to appear in Google search results. 48% wish to see placements in Unique Homes and 47% in the Wall Street Journal. 38% say representation in the DuPont Registry is important. Consumers are also interested in receiving customized and personalized reports showing where their property is being marketed.

The bottom line, according to the White Paper? Good reporting on all marketing tools and services is critical. We should note in that respect that Luxury Portfolio International is the only luxury real estate program that gives agents the ability to report on comprehensive listing metrics, from inquiries and views down to which city, state, country a visitor came from and even what language or currency they use. It is as good as Luxury Marketing gets.

Happy hunting!

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Intero Insider: Why You Should Never Try to Time the Real Estate Market

By Gino Blefari | May 17th, 2012 0 Comments

“Is now a good time to buy my first home?” is an age-old question that all renters ask themselves at some point. The arguments pro and con vary widely – with some hinging on hard statistics that will show good reason pro and con, and others relying solely on more intangible things like lifestyle, future plans and core values.

The Wall Street Journal printed an in-depth take on this argument pro and con, with detailed and well-sourced points of view from both Eric Lascelles, chief economist at money management firm Global Asset Management (pro buying now), and Gary Shilling, president of A. Gary Shilling & Co., an economic consulting firm in Springfield, N.J. (con buying now).

Their arguments in a nutshell:

Mr. Lascelles: “Investors understand that this is the mother of all buyer’s markets, and won’t last forever.” Conditions are amazing with low interest rates that can be locked in for the life of the loan, ample supply and low prices in most markets. Because investors see this opportunity, they’ve been gobbling up properties for themselves. The open window for average home buyers won’t be there long.

Mr. Shilling: “Buying a house now would be a disastrous investment if prices fall another 20% or more.” The problem is excess inventories, which will continue to pull prices down. Shilling and his associates have calculated an excess of 2 million housing units in the market.

What’s missing here is a deep discussion of the psychology of homeownership, which can’t be dismissed. If renters have it in their heads that they want to buy a home at some point in their lives, they’re most likely going to lean toward Mr. Lascelles’ view of the current real estate market. Why not buy now, when conditions are so good? And with investors increasingly taking up more share of the homes being sold each month, there is a sense of urgency that the days of buyers’ favor won’t be here forever.

What’s also missing is acknowledgment of the completely individualized situation in each local market, and each household. These high-level arguments are interesting, but unfortunately are meaningless to most of the people sitting at kitchen tables making the decisions to buy or not buy. What goes into those decisions revolves much more around the family finances, job outlook, and neighborhood housing market. Sure, savvy buyers will be reading the news and keeping up with how the overall market is moving. But, at the end of the day the national market forecast and economic indicators are not something you see on the average family’s “back of the napkin” short list of considerations for whether to buy or not to buy.

Real estate is local, and individual. Because of this, many attempts to “time” the market by entering at just the right time are either subjective or futile. Buyers are much better off timing their decision with what fits with their own lives.

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The Luxury Insider: East Meets West

By Alain Pinel | May 9th, 2012 0 Comments

The Chinese are coming!…Or should I say a lot more are coming, and contrary to those who came over to the US in the 19th century, the new wave of Chinese immigrants are coming with lots of money and are eager to spend it. They are changing the real estate landscape and setting new real estate values in many states and regions.

The first Chinese immigrants, laborers for the most part, arrived in the mid 1800’s, “escaping” from the poor Southern provinces of the old country to look for job opportunities on our West Coast.  Life, for a while, was hardly better than the one they left behind. The attractive mirage that the Gold Rush represented absorbed most of them. From mining for gold, they eventually gravitated to railroad labor. They became low wage workers for a booming industry busy with the construction of the Transcontinental Railroad.

According to Wikipedia, the Chinese accounted for over a tenth of the population of California in 1880. Today, the percentage is down to roughly 3.5% (about 1,300,000), but we are not talking about the same curriculum. Today’s Chinese Americans represent a huge economic power and their appetite for real estate will not be satisfied anytime soon. They want a lot and can afford the best.

This is especially true in California’s Silicon Valley, home of the brightest and most ambitious new Chinese Americans. Many of them, young top guns in the fields of engineering & sciences, came in the mid 1980’s, screened with a fine comb by their government which paid dearly for their scholarships in leading universities. One of them was Minhua Jin, now a star real estate agent for Intero Real Estate in Cupertino. She routinely works with Chinese American clients.

Minhua explained to me that unlike most of the “typical” buyers and sellers, the Chinese buy but they very rarely sell, if ever.  They keep what they buy and, as long as they can, they buy more of the same. There are plenty of reasons for that:

  • New laws were enacted in Mainland China a few years ago limiting to 4 the number of residential units any person could buy. Now that money is flowing over there, there is only so much art or items of value people can put their hands on to protect their wealth and build equity.
  • In the main country, they cannot buy the land on which the real estate is built. It belongs to the government, which is leasing the pad for 70 years. Considering that there is no clue as to what may happen when that lease expires, a lot of homeowners and investors are obviously unsecured about their investment in China.
  • Government policies are changing often, further complicating the process, the pertinence of the investment and therefore reducing the appetite for local real estate.
  • Education is a very big deal in China these days, especially business & technology rather than just academics that they do well at home. Whenever possible, well to do families send their kids to the best schools in the US or Europe. Some go back; some stay.
  • Overall, the Chinese are not rich people. Perhaps only 1% of the population can dream of ever buying a home (or many) in the US…But you know what? 1% of 1.4Billion people is a lot of people, a lot of qualified and determined buyers!
  • Chinese real estate in key cities multiplied about twenty times in value over the last 15 years or so; those who bought made enough money to buy anything, anywhere, whether in San Francisco, or New York, or Paris, or London.
  • The Chinese currency is going up while the dollar is going the other way. Buying a multi-million dollar home here is getting to be very affordable.
  • The Chinese, as an old & dear tradition, believe in real estate. They aspire to own their home. You might call it the “Chinese Dream”.

It is clear that the impact of Chinese Americans and Mainland Chinese on US real estate is rapidly changing the rules of the game. It can only accelerate with a growing number of buyers and their growing purchase power. Chinese Americans are part of the new technologies, part of the new wealth. In the Silicon Valley, for example, 1 out of 5 high tech start ups are led by people from Chinese descent, according to a study done by Annalee Saxenian, a UC Berkeley professor.

Knowing how to work with the Chinese is no longer an interesting option for real estate agents, from one coast to the next. It is simply a mathematical necessity.

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Intero Insider: Help for Underwater Homeowners

By Gino Blefari | May 9th, 2012 0 Comments

Despite the recent bout of good news that’s spreading through some real estate markets in the U.S., the word “underwater” is still part of the vocabulary in many others. In fact, the problem is still so widespread that Freddie Mac, the U.S.-supported mortgage company, this week announced it will drop a fee associated with refinancing deeply underwater mortgage loans.

The fee drop signals that the government and its mortgage giants Freddie Mac and Fannie Mae are determined to make the Home Affordable Refinance Program (HARP for short) work. Freddie Mac said it will eliminate a fee of 0.5 percentage point, known as a “cash adjustor,” on home loans that are refinanced under HARP and have balances greater than 125% of the property’s current market value.

The move aims to help underwater homeowners refinance their mortgages, thus enabling them to stay in their homes (as opposed to foreclosing or walking away). Freddie Mac officials said that they hope the drop of the fee will encourage more homeowners to take advantage of HARP.

There were 11.1 million homes with negative equity at the end of the fourth quarter 2011, according to a report from CoreLogic. The number of homes with negative equity (or that were “underwater”) was up from 10.7 million the previous quarter, showing that the problem had not stopped growing at last tally.

Many underwater homeowners do wish to stay in their homes. Refinancing and taking advantage of HARP can help. But some good old motivational math can also help tremendously with moral, which is why I thought these calculators developed by HSH are interesting and potentially helpful:

  • KnowEquity When is a calculator that aims to help underwater homeowners answer the question, when will I be above water again?
  • KnowEquity How is a calculator that aims to help underwater homeowners what it will take to reach equity within a specified time frame.

Both calculators are helpful if you are trying to set a goal to stay in your home. Knowing what you need to do to get there is a powerful motivator.

Unfortunately, when looking at the numbers, underwater mortgages will not be disappearing anytime soon. While some markets are seeing values increase, it’s just not enough to offset the lost equity that spans 11.1 million home loans. So seeing a bit of positive news in the form of help and motivation on this front is worth flagging.

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Intero Franchise Services, Inc. Expands Across the Mississippi

By Teressa Francis | May 8th, 2012 0 Comments

Nashville, TN veteran real estate office gains fresh start with Intero

Intero Franchise Services Inc., a company affiliated with Intero Real Estate, Inc. (“Intero”), recognized as one of the fastest-growing and most innovative brokerages in the industry, announced today that it has expanded into the greater Nashville, Tennessee area.  The Grand Opening will take place on June 7th.

Located in the Nashville suburb of Murfreesboro, the office is ideally situated to service Nashville, Green Hills, Franklin and Brentwood.  This office will mark the 44th franchise and the first to be east of the Mississippi, increasing Intero Real Estate’s reach farther than it’s ever been in the U.S. “We are excited to extend the Intero brand across the Mississippi.” Gino Blefari, Intero President and CEO, says.  “We go where we find people who are the right fit for the Intero brand because they have the same values and believe in the culture we’ve created.  In Murfreesboro, we found those people.”

The location, a former Prudential office, will transition with 48 agents and will be growing.  Intero Middle Tennessee, as it will be called, is owned by Mark Rowland and will be managed by Don Day, both real estate veterans with over 15 years of experience.  “We were really attracted to Intero’s Leadership Team and their ability to continue to gain momentum during a time when so many seem to be losing it,” states Rowland.  “The technology platform and operational support provided by the company will truly make a difference in all of our future transactions,” adds Day. “We can move forward with our business knowing we will be well taken care of.”

With this change, Intero Middle Tennessee will be focusing on the luxury market, taking advantage of Intero Prestigio, a luxury division providing an exclusive menu of global marketing services customized for each property.

Intero Middle Tennessee

3173 S. Church St.

Murfreesboro, TN 37127

About the Intero® brand

Founded in 2002, Intero Real Estate Services, Inc. has quickly become one of the premier real estate brands in the U.S.  In 2004, Intero Franchise Services Inc. began franchising and currently is operating in many of the western states.  In 2009, Intero International Franchise Services, LLC embarked on developing territories in Asia Pacific, Europe, Middle East, Africa, and the Americas.  The companies are private and headquartered in California’s Silicon Valley.

Contact:

Teressa Francis

+1 408 342 3010

tfrancis@interorealestate.com

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The Luxury Insider: Do You Really Need a Realtor?

By Alain Pinel | May 2nd, 2012 0 Comments

Every so often, when I feel like a sponge for professional knowledge or when I want to justify the hefty dues I have to pay to NAR -the National Association of Realtors-, I read the “Economists’ Outlook” blog. The other day, one caught my eye. The title and the content were not particularly new or earthshaking but I still read the piece twice. I guess I liked it. You’ll know why when I unveil the title. Here it is: “Home Buyers Use of an Agent in Transaction Has Risen For Past Decade”.  Music to my ears.

As a Realtor, I like being liked. There is nothing like recognition for a job well done. Sure it is self serving but it’s nice to see that home sellers are more aware today than ever before of the value of trusting a Realtor with the sale or the purchase of a home.  You see, even a guy like me needs a pro. I have been around the block a few times, I bought and sold many homes for my own account and personal use, but when my money is concerned, I need an objective expert opinion and someone who can negotiate on my behalf. I need a Realtor.

Buying or selling a home is highly emotional. You don’t want to be emotional and confused when you sign a listing or a purchase contract. It’s your money that we are talking about. It is your home.  It’s where you and your family lived or will soon live. Buying or selling is also a very difficult task, judging by the number of attorneys who specialize in the discipline and make a good living at it.  In the high end, using a pro is not an option: there is too much at stake, too much to win or to lose.  Playing Russian roulette is not a game to play in a real estate transaction.

According to the NAR “2011 Profile of Home Buyers and Sellers”, a record 89% of recent buyers purchased their home through a real estate agent or broker. On one hand, I am pleased to learn that the percentage is moving up; on the other, I honestly wonder who on earth are the 11% of buyers who did not get the message!… Promise me you will never do that again!

In 2001, just a few years back, “only” 69% of the buyers bought through a Realtor.  I guess those who did not learned their lesson quickly because, as we mentioned above, the percentage has gone up ever since, with the strange exception of 2009 when it dropped a few notches to 77% after 81% the year before.  My take on this anomaly is that after a couple of lousy years when properties did not move and values went the other way, some home sellers blamed their agent and decided to go “For sale by owner.”  That lasted only as long as a New England winter (about 6 months…).

Actually, the NAR study suggests that only 4% of the 2011 buyers bought directly from the previous owners (It was 15% in 2001). The other 7% missing bought from a builder or a builder’s agent.  When you look at the trend over the 10 year stretch of time, jumping from 69% to a record of 89%, you’ve got to feel good if you are a Realtor.  At that tempo, if we are not careful, we may get well over 100% in another 10 years!…

It is particularly comforting to note that many crystal ball readers, years ago, were predicting that Realtors would phase out as more and more knowledge about the business, about the inventory of homes, about values, about financing, about contracts…was dispensed online for the Public to read, learn and use. Obviously it did not happen that way; quite the opposite in fact. At a time when buyers and sellers know as much as they do, the more they know, the more they know ….. what they don’t know. That’s why Realtors are more relevant and essential than ever. Thank you.

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Intero Insider: 4 Signs It’s Time to Buy a Home Now

By Gino Blefari | May 2nd, 2012 0 Comments

If ever there was a fantastic time to buy a home, it’s right now. Never mind the fact that I head a leading real estate brokerage company. Let the statistics show you why now is your best bet to get into the housing market:

1. Home values are recovering

U.S. home values rose 0.5% from February to March, the largest monthly increase since May 2006, before values at the national level peaked, according to a recent report from Zillow this month. In addition, the company said in its home value forecast that it expects 19 of the 30 markets it covers will reach a bottom in values this year. Phoenix and Miami-Ft. Lauderdale are expected to see significant home value increases.

2. Interest rates are still extraordinarily low

The cost of borrowing is still extremely attractive for buyers who qualify and are ready for the financial responsibility of a home mortgage. Saying mortgage rates have hit a new “record low” has become a bit of a broken record. At an average 4.04% in the latest Mortgage Bankers Association survey, rates on the standard 30-year fixed-rate mortgage are almost too good to be true. While there’s no sign from the Federal Reserve that rates will increase significantly anytime soon, it’s definitely a great condition for buyers right now.

3. Multiple offers are back

Demand for housing is starting to outweigh supply in some markets across the country. We covered the return of bidding wars this spring in markets like Silicon Valley, Miami, Seattle and Washington, D.C. Even despite the presence of “war” like situations, multiple offers are once again a fact of life in markets with strong economies and job prospects.

4. Rents are rising with no end in sight

The median U.S. rent was $721 per month in the first quarter, up 5.6% from the same period a year earlier, according to the Commerce Department. Altogether, rental income has increased 12% in the year ended in March. In addition to rising rent, the supply of units is the tightest in more than 10 years, with 8.8% of units vacant in the first quarter. This at a time when the demand for rental units is at the highest in 15 years. This means more buyers likely will continue to jump from that tight market into owning while the numbers make sense.

As you can see, the buyer market is about to get more crowded than it’s been the last few years. These are each solid market forces that could push more and more buyers off the fence, creating more transactions and helping to lift home values this year and next. If you think you want to buy – or know buyers who are testing the waters – now is your chance to take advantage of prime home-buying conditions.

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The Luxury Insider: Want a Piece of the City of Lights?

By Alain Pinel | April 25th, 2012 0 Comments

Last week, I wrote about the power of the “Leading Real Estate Companies of the World” network and their “Luxury Portfolio” high end division. They are our partners in the marketing and sale of upscale homes and estates all over the globe. Our counterpart in France is a firm by the name of FEAU,” Daniel Feau Conseil Immobilier” to be exact. They are to luxury Parisian real estate what Cartier is in the jewelry business. It can be said that they have their stamp on the most desirable and expensive apartments and mansions in and around Paris and they are the place to go for the fortunate few who want to buy them.

A few days ago, Charles-Marie Jottras, their President whom I have known for several years, sent me a study they just completed of the captivating high end market in Paris and the Western suburbs. I thought you would enjoy reading some of the findings. Perhaps you are looking to buy in Paris, or perhaps you just want to do some free “window shopping “…. Or maybe you are curious to know who the people who buy those multi-million dollars condos in the City of Lights are. Well, whatever your motive may be, enjoy!

The first thing that jumps at you at first glance is that the Paris market traits, as far as the buying demand, are pretty similar to what we are observing in other European capitals, like London, or in our own large metropolitan city centers, like New York, Miami, Los Angeles or the San Francisco Bay Area, to name a few.  There are two kinds of buyers: the domestic buyers and the foreign buyers. They are not targeting the same real estate…Question of means. The foreign buyers now represent the lion’s share of the qualified demand, and the higher the price, the bigger the share. And you know what? At the very top of the price scale, it looks like we are competing for the same exact buyers!

Basically, the domestic demand in Paris is confined to a relatively small range, between roughly $1.5M and $3.5M, the entry level to what could be considered the high end in the region. Above $3.5, the large majority of the French buyers are out of the picture. Enter the foreigners…  They are having a blast buying the crown jewels, right and left, up to $100M, or whatever.  Who is counting?  They buy beauty, they buy financial security (kind of), they buy in full ownership (which is not necessarily the case where they come from), they buy glamour and fame.

FEAU went as far as determining who, among the foreigners, was buying what and in what price range in Paris. Take a look at the findings of their study based on recent months and compare with your own big city market. I know that Paris, at this point, is ahead of the pack, but this will give us the flavor of things to come in our most desirable and very pricey US markets.

  • European buyers (euro zone) represent, together, 13% of the foreign buyers in Paris. Just like the French locals, they are in the $1.5M to about $5M max and prefer the historic districts.
  • The British (they are European too you might say, although they don’t admit to it) represent 10% of the buyers. They are shopping for the same goods mentioned above and in the same price range.
  • The Swiss count for 15% of the sales (which was a big surprise to me) and they buy up to about $13M. Their economy is doing alright. They have quite a bit of the world’s money; maybe some of yours.
  • Africans have an 8% share of the Paris luxury stock and buy also up to about $13M.
  • The Middle East buyers represent 12% of the total. They start their shopping at roughly $10M and go up to $100 or so. Whatever it takes.
  • We, Americans, together with our Canadian friends, account for 10% of the Paris buyers according to the study. We have more modest means. Our range is $2.5M to $6M, mostly in historic districts. Nostalgia.
  • Brazil and the rest of South America is good for 4%. They spend up to $6M but want the money districts.
  • The Russians absorb 20% of what’s offered and they want the best of the best, up to about $25M.
  • Finally, the growing numbers of Chinese buyers represent today 8% of all buyers in the City of Lights. They too want the cream of the cream, at least what they can buy up to $13M.

That’s it. What do you want to buy? What’s your budget?

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