The need to accommodate the international real estate market continues to be a priority for industry providers and the reasons to do so mount nearly every day.
The number of immigrants and foreign investors coming to the United States is increasing, more and more Americans are looking outside the country for a lower cost of living, and wealthy citizens with disposable income still dream of an exotic getaway abroad.
According to the National Association of Realtors, approximately 178,000 of its members closed a transaction with a foreign buyer in 2008, including approximately 61 percent of all Florida Realtors. About the same number of agents had a deal fall through with a foreign buyer due to price, immigration laws, or higher-than-expected property taxes and home insurance costs.
Janet Case, former chief executive of the two largest Realtor associations in California’s Silicon Valley, saw the need for an international multiple listing service that would address the needs of agents and consumers. The spark was her purchase of an old farm house in France four years ago.
"I found it to be a very difficult process with no MLS or shared information between agencies," said Case, who holds an undergraduate degree in economics and an MBA from Stanford’s Graduate School of Business. "There were serious market inefficiencies and no system that combined inventory and networking for agents."
NAR, the largest trade association in the United States, is a member of the International Consortium of Real Estate Associations (ICREA), which has a business-to-consumer Web site but no common place where agents could share listings, interests and forms in different languages.
Believing she could add a service that would benefit professionals and consumers, Case founded Palo Alto, Calif.-based Proxio, a borderless real estate market that gives agents the ability to market themselves and their listings globally. It launched in Europe in 2007 and in the U.S. last year.
It now has a presence in 65 countries, with an inventory of approximately 110,000 listings worth more than $55 billion. Its services are in 11 different languages to support its network of more than 4,400 participating agencies and 24,000 agents.
The company makes its money by charging for subscriptions, typically to individual agents, and wholesale to groups such as MLSs, Realtor associations and media companies.
"I think the concept will truly benefit consumers, especially on the sell side," Case said. "There will be a lot more exposure of a specific property listed for sale to qualified agents all over the world who have the credentials, buyer network and performance to get it sold." …CONTINUED
While the "inflow" of Russians, Germans and United Kingdom residents has been common in the past five years along the Atlantic Coast, the "outflow" of Americans heading to Europe, Canada and south to the Central America sun also is increasing.
Sales to Americans abroad have slowed — mirroring a pattern in the U.S. — yet many regions are experiencing steady sales, thanks mostly to the international boomer profile.
"Remember that World War II ended at the same time in Europe as it did in the United States," said Lawrence Yun, NAR’s chief economist. "Many of the Europeans had bought in Spain, but the Spanish market is undergoing a transition now. Some of them see the lower cost of U.S. real estate and consider it a good investment."
While the total foreign business (approximately 3 percent) is tiny compared to the number of total deals done in the United States, the category is expected to rise faster than any other housing group.
"I have Realtors who have businesses in Florida and in Panama and others with businesses in Texas and Costa Rica," Yun said. "They travel back and forth. This can be new business for Realtors or they can also simply focus on the referral business."
North American referrals are a hot commodity, especially in Europe, the Caribbean and the rest of Central America. U.S. brokers and agents have been asked to send potential clients to offshore developers and marketing companies, and earn a handsome commission for doing so.
Baby boomers, born between 1946-64, number approximately 77.8 million in the United States alone. Many of them are discovering they have not saved enough for retirement, have been decimated by the financial meltdown, and will be completely reliant on Social Security and Medicare to support them in their retirement years unless they work longer or find a less expensive place to live.
In some cases, that place is outside the U.S. — the same sunny regions where their well-prepared friends will be retiring in style.
***
What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.
