To the surprise of many, the pandemic has not wiped out the international real estate market in the United States.
Latin American investors are once again looking to invest in US real estate to take advantage of the real estate market and benefit from low interest rates in an environment marked by the more positive attitude towards Latin Americans of the Joe Biden 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 for me to see my sales increase since the pandemic began,” said Alan Medellín, who from Bogota, Colombia, sells furnished apartments in a resort called The Grove Resort & Water Park, near Walt Disney World in Orlando, Florida).
THE PANDEMIC GIVES GOOD SURPRISES
“Suddenly, customers started coming to me, not only from Colombia, but also from Mexico, Argentina, Peru and Chile,” says the real estate agent in statements provided by the communication agency Top of Mind.
Medellín points out that “the fact that today we can do practically anything, from displaying a property to closing the purchase, has opened up many markets for us”.
“With the disaster triggered by the pandemic, investors across the region are telling me that their only option is to invest in bricks and dollars, because that gives them more security and peace of mind,” added Medellín, whose sales rose 180% in comparison to the previous period covid-19.
In part, this is due to incentives created by US developers to attract international buyers.
For example, The Grove offers a guaranteed return program and a subsidized dollar program, in which a discount is made to the exchange rate that benefits the investor.
According to Medellín, many of its Latin American customers are looking to invest in a more stable economy, as the pandemic has created a deep economic crisis in their countries.
The US was also severely affected, and its economy contracted by 3.5% in 2020, the largest decline since World War II, but still does not compare to the economic contraction suffered by Latin American countries.
For example, Mexico saw a decline in GDP of 8.5% in 2020, according to official figures, with forecasts for Colombia and Argentina falling by 6.9% and 10.4%, respectively.
FLORIDA AND THE THREE GREAT DESTINATIONS
Florida, more than any other US state, relies heavily on the international real estate sales market.
Miami, Orlando and Tampa are the top three destinations for foreign buyers, according to Florida Realtors, a real estate agency.
Venezuela, Argentina and Colombia were the Latin American countries that bought the most properties in Florida between August 2019 and July 2020, according to Florida real estate agencies.
In total, foreign buyers worldwide invested 15.6 billion in that period, which is 2% less than the 16 billion invested in the last 12 months.
Since June, demand for Florida residential properties has exploded, prompting a rapid appreciation of real estate.
Sales at the national level in 2020 reached the highest level since 2006, according to figures recently published 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 WAS RAPID
This demand leads to a rapid appreciation of the properties. In Orlando, property prices are expected to rise 5.8% this year, according to Relator.com.
Another reason why there is an increase in purchases in the US is that interest rates are at a historically low level. This leads international buyers to take out loans in the US to expand their purchasing power.
“Foreign buyers can get an interest rate of 3.625% with an advance of 40% on the value of the property and 7% with an advance of 30%,” said Melissa McGlinchey, manager of Florida International Funding in Orlando. provided by Top of Mind.
“The most important thing to get financing,” he added, “is to be able to demonstrate where all the funds that will be used for the transaction come from. All foreign loan programs require tracking of these funds for a period of 60 days. “
INHABITED EFFECT
Another reason to invest in the US is that Latin American investors feel welcome again with the Joe Biden Administration.
His predecessor, Donald Trump, had a tough relationship with the region, and his government caused distrust.
Luz Barragán, who lives in Cali, Colombia, bought a furnished apartment in The Grove, Orlando, and now that Biden is president she is thinking of probably buying another apartment in 2022, she told Top of Mind.
“If Trump had won, I would have sold my investment because the United States was going to dictatorship,” said Barragán, who is investing in the United States so that his adult children can benefit from this legacy in the future.
Barragán decided to buy in Orlando for the theme parks and thus be able to stay on his property when he goes to Disney with his children and grandchildren in the future.
“What I liked most about this investment opportunity was that The Grove guaranteed me a fixed return and, in addition, I fell in love with the resort when I saw it,” said Barragán from the resort, where apartment prices start at $ 196,000.