A year and a half into the coronavirus pandemic, U.S. agents who focus on higher end properties are seeing significant demand from international buyers who have been locked out of the American real estate market, according to Compass CEO Robert Reffkin.
Reffkin made the comments during an interview Tuesday with CNBC, saying that Compass agents in markets such as New York, Florida and California are currently seeing “incredible pent up demand from the international buyer.” That demand is originating from Canada, Asia, Europe and Latin America, according to Reffkin, and is a result of foreign real estate consumers not having access to the U.S. market for so long.
“The demand will have to wait until things do open up,” Reffkin said, “but they will eventually. And when that happens our agents, they have clients in those markets and they are telling us the demand is very real and significant.”
Reffkin also said during the interview that he expects New York City real estate to rebound. The Big Apple was of course an early COVID-19 hotspot and subsequently suffered as consumers — many of whom could suddenly work remotely — gravitated to more remote areas with cheaper prices and roomier homes. However, Reffkin said Compass agents are now seeing bidding wars in New York City, which wasn’t happening last year, and that especially at the higher end, the market appears to be picking up. He expects that to continue.
“We’re seeing many buyers who bought in Florida or who bought in Connecticut or in Westchester moving back to New York,” Reffkin said. “People remembering what they love about New York. That energy of Central Park. The energy of restaurants.”
Asked how he’d feel about investing money in the city’s real estate, Reffkin responded, “I would feel confident about buying in New York at this time.”
Robert Reffkin discusses the real estate market on CNBC Tuesday. Credit: CNBC
Reffkin’s comments come one day after Compass revealed it brought in almost $2 billion in revenue between April and June, and that it significantly cut its losses during that same period. Those figures made Compass a standout among real estate companies during the current earnings season.
During his call with investors Monday to discuss Compass’ earnings, Reffkin argued that the market was also poised to remain strong in the near future. He reiterated that point during Tuesday’s CNBC interview, saying that interest rates are still low and many buyers are still out in the market.
“In terms of buyer demand,” Reffkin said, “we had five buyers on average for every home that had an accepted offer last quarter. So, there are four more buyers in the market.”
