By Ismary Munet
The growth of the Asian economy is making its impact on the U.S. housing market, and in particular in cities, such as New York, San Francisco, Washington DC, Houston, Boston, and Los Angeles.
The 2014 Global and Luxury Summit, which was announced on February 28 in a press conference that was held by the Asian Real Estate Association of America (AREAA), will be held from April 12 to April 15. It will highlight the emerging market opportunities present in both the international and luxury real estate markets.
AREAA is a nonprofit professional trade organization dedicated to promoting sustainable homeownership opportunities in Asian American and Pacific Islander communities. It also offers events, such as the The Global and Luxury Summit, to help guests and attendees expand their international and high-income clientele, which also helps their businesses grow. The Global and Luxury Summit will be held in New York City at the Waldorf Astoria Hotel.
The housing market has seen an increase in Asian investors. For the 12 months ending in March 2013 alone, the total sales volume to international clients (“international sales”) is estimated at $68.2 billion, which is approximately 6.3 percent of the total U.S. Existing Homes Sales (EHS) market of $1.08 trillion for that same period.
Traditionally, Asian investors, such as Chinese buyers, looked into real estate in order to provide housing for their children while they studied in college or graduate school. According to Kathy Tsao, a broker at Douglas Elliman, these same investors are now looking to participate in joint venture opportunities. Tsao states that she has noticed two new emerging trends with Chinese investors; the first trend being that the children they are buying apartments for are much younger, and the second is that more investors and developers are not solely looking to buy property, but to also look for joint ventures and multiple properties.
Gordon Hoppe, Director of Sales at Corcoran Sunshine, has also noticed a shift, in the past six to twelve months, in locations of the property investors are looking into in New York. He explained that Chinese buyers used to look for buildings that were near Columbia, NYU, Midtown, and near the rivers, but have recently been buying in Greenwich Village.
Shawn Elliott, a broker specializing in luxury homes on Long Island’s Gold Coast, has also seen an increase in the number of Chinese clientele.
David Friedman, president of Wealth-X, a firm that gathers data on the ultra wealthy, stated that wealthy Asian individuals are investing in luxury real estate abroad due to geopolitical risks in their region.
AREAA’s Global International Real Estate reports that of the total international transactions, $34.8 billion is attributed to Type A clients (Foreign clients with permanent residences outside the U.S. that typically purchase property for investments, vacations, or visits of less than six months to the U.S.), and $33.4 billion to Type B clients (Clients who are recent immigrants or temporary visa holders residing for more than six months in the U.S. for professional, educational, or other reasons).
Hoppe stated that in the last year, real estate prices in the New York market went over $2,500 a square foot, which hasn’t been seen since before the market crash in 2008. The international buyers have helped with this comeback in price.
AREAA also reports that of the REALTORS® who reported transactions with foreigners, 54 percent reported that clients were referred to them by friends, previous clients, and international and domestic referrals. About 23 percent of clients were obtained through website or online listings, which is an increase from the 20 percent figure in the previous survey.
It has been concluded that international buyers and investors have been and will continue to increase. The 2014 Global and Luxury Summit will bring together hundreds of real estate experts from around the globe to discuss issues from today’s international real estate market trends, and will also help expand attendee’s business connections.
For more information readers can visit: http://areaa.org, or to register for the 2014 AREAA Global and Luxury Summit, visit http://summit.areaa.org.
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