Foreign buyers are holy grail for luxury real estate industry
John and Norma Somers divide the year between their home in the Prestancia neighborhood of Sarasota County and their hometown north of London, where they own several properties, including a hotel. Local retailers are crafting different marketing approaches to lure more foreign investors like the Somers, who have purchased multiple rentals in the area.
The British couple, from a small town 30 miles north of London, had visited Orlando and the east coast and were not overly impressed.
Feeling adventurous, they moved west about five years ago, bypassing Clearwater and Bradenton to eventually settle in South Sarasota. Within two weeks, amid the start of a historic slide in home prices, they owned a seasonal home in Palmer Ranch’s tony Prestancia community by leveraging a British pound that was valued at double the U.S. dollar at the time.
The couple, who spend half the year in Europe operating hotels and investment properties, have since bought six more Sarasota condominiums that they rent out — even as the monetary exchange rate has become less favorable and home prices have risen. Real estate is their new hobby.
Real estate brokers here are working to change that, aiming affluent, foreign buyers from Europe, Canada and Latin America at the softest segment of Southwest Florida’s real estate market. The strategy, once considered a silver bullet for the area’s housing woes, is commanding similar attention as a potential sponge for inventory priced above $1 million.
Last year, Michael Saunders & Co., the big regional brokerage, spent $592,000 on public relations in the U.K. alone.
“We’re getting real estate investors from all over the world!
Attracting foreign money has worked in other cities, most notably Miami, where international buyers, mainly from Brazil and other emerging South American nations, have steered the housing recovery and prompted new condo construction.
But these days, with the exchange rate not as attractive to Europeans, home prices on the rise and a financial crisis still rocking countries across the Atlantic, other market observers see an uphill battle.
Some housing experts see foreign buyers as the answer.
The toughest component, here and across America, is the ability to move up in price ranges, said Paul Boomsma, president of Luxury Portfolio International, a network of high-end real estate firms.
The world’s most wealthy also have been thinning their real estate portfolios. From 2008 to 2011, second home ownership among the richest 10 percent of international buyers dropped from 48 percent to 28 percent, with beachfront properties in areas like Southwest Florida taking the biggest hit, research commissioned by Luxury Portfolio shows.
These affluent foreign buyers are trending younger, and they favor smaller homes with more luxurious features rather than the spacious, 6,000-square-foot estates that were popular during the area’s building boom.
West coast properties, especially luxury condominiums, could be a draw to foreign investors from areas such as Japan, Singapore and China.
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