To the surprise of many, the pandemic has not wiped out the international real estate market in the United States.
Latin American investors want to reinvest in US real estate to take advantage of the real estate market’s appreciation and take advantage of low interest rates in an environment characterized by the Joe Biden’s more positive attitude towards Hispanic Americans. administration .
To the surprise of many, the pandemic has not wiped out the international real estate market in the United States.
“It was an unimaginable surprise to me to see that my sales have increased since the start of the pandemic,” said Alan Medellín, who sells furnished apartments in Bogotá, Colombia, at a resort called The Grove Resort & Water Park, near Walt. Disney World. in Orlando, Florida).
THE PANDEMIC GIVES GOOD SURPRISES
“Suddenly, customers started to reach me, not only from Colombia but also from Mexico, Argentina, Peru and Chile,” the broker said in statements from communications agency Top of Mind.
Medellín emphasizes that “the fact that we can do just about anything today, from showing a property to closing the purchase, has opened up many markets for us.”
“With the disaster that has unleashed the pandemic, investors from across the region are telling me their only option is to invest in bricks and dollars as that will give them greater security and peace of mind,” adds Medellín, whose turnover compared to 180 % increased. up to the period prior to covid-19.
In part, that’s because of incentives that US developers have created to attract international buyers.
For example, The Grove offers a guaranteed return program and a subsidized dollar program, where a discount is made on the exchange rate that benefits the investor.
According to Medellín, many of its clients in Latin America want to invest in a more stable economy, as the pandemic has caused a deep economic crisis in their countries.
The US was also hit hard, with its economy shrinking 3.5% in 2020, the biggest drop since World War II, yet it doesn’t compare to the economic contraction of Latin American countries.
For example, Mexico saw its GDP fall by 8.5% in 2020 according to official figures, the projections for Colombia and Argentina are for a decrease of 6.9% and 10.4% respectively.
FLORIDA AND ITS THREE GREAT DESTINATIONS
Florida, more than any other state in the US, is highly dependent on the international market for real estate sales.
Miami, Orlando and Tampa are the top three destinations for overseas buyers, according to Florida Realtors, an association of real estate agents.
According to Florida Realtors, Venezuela, Argentina and Colombia were the Latin American countries that bought the most properties in Florida between August 2019 and July 2020.
In total, foreign buyers from around the world invested 15.6 billion over that period, which is 2% less than the 16 billion invested in the previous 12 months.
Since June, the demand for homes in Florida has exploded, causing real estate to rapidly increase in value.
Nationwide sales reached their highest level since 2006 in 2020, according to figures recently released by the National Association of Realtors.
In December alone, sales of single-family homes, townhouses, condominiums and cooperatives increased by 22.2% compared to the same month in 2019.
PRICES ARE RISING FAST
This demand causes a rapid appreciation of properties. According to Relator.com, property prices in Orlando are expected to rise 5.8% this year.
Another reason why US purchases are on the rise is because interest rates are at historically low levels. This leads international buyers to take out loans in the US to increase their purchasing power.
“Foreign buyers can get an interest rate of between 3.625% with a down payment of 40% of the value of the property and 7% with a down payment of 30%,” said Melissa McGlinchey, manager of the Florida International Funding office in Orlando. provided by Top of Mind.
“The most important thing to get funding,” he added, “is to be able to show where all the money that will be used for the transaction is coming from. All foreigner loan programs require those funds to be tracked for a period of 60 days. . “
THE PRAYING EFFECT
Another reason to invest in the US is that investors from Latin America feel welcome again at the Joe Biden Administration.
His predecessor, Donald Trump, had a troubled relationship with the region and his administration aroused suspicion.
Luz Barragán, who lives in Cali, Colombia, bought a furnished apartment in The Grove, Orlando, and now that Biden is president, she’s thinking about probably buying another apartment in 2022, she told Top of Mind.
“If Trump had won, I would have sold my investment because the US would become a dictatorship,” said Barragán, who invests in the US so that his adult children can benefit from that legacy in the future.
Barragán decided to buy the theme parks in Orlando and stay on his property if he goes to Disney with his children and grandchildren in the future.
“What I liked the most about this investment opportunity is that The Grove guaranteed me a steady return and on top of that I fell in love with the resort when I saw it,” said Barragán of the resort, where apartment prices start at $ 196,000.