Business, Investment, Money Matters, Property

International Investors Pouring Money In Miami, LA And NY Real Estate


People often talk about the investment that is being made in the luxury real estate market – and with good reason. Most investors understand that real estate is often a reliable route to a good return. However, one factor that is currently being overlooked (except for those in the know) is the number of foreign investors in the United States luxury real estate market. In fact, these investors have bought more than $7.5 billion worth of luxury property across the United States.

Located in a relatively small area

Interestingly enough. the clear majority of these investments are represented in a relatively small  geographical area across the United States, with most purchases in Manhattan, Los Angeles, and Miami,  data comes from luxury brokerages Beauchamp Estates and Leslie J Garfield & Co. When compared to the 12 months before, the total foreign investment in U.S. luxury real estate jumped by almost three-quarters between March 2016 and March 2017.

Almost 40 percent  of the total luxury purchases were in these three hotbeds. The majority of luxury homes were purchased in Miami (25 percent), followed by Los Angeles (9 percent) and Manhattan (3 percent).

The difference between the locations

Foreign investors dominate the luxury real estate market in South Florida. Miami has the lowest price-per-square-foot between the three locations. Foreign buyers own around 80 percent of all luxury Miami real estate. If we compare that to Manhattan (27 percent) and Los Angeles (20 percent) it is obvious that South Florida real estate offers a tremendous benefit for luxury real estate.

Another interesting aspect of the entire luxury real estate market in Miami is the fact that cash was the preferred payment method in 95 percent of those properties. Many of the buyers on the Miami market come from South America. In fact, over 75 percent of all luxury homes that cost more than $3 million, foreign buyers paid for them in cash.

According to the aforementioned Beauchamp Estates, Miami should see a tremendous growth in ultra-high net worth individuals. They expect that Miami is going to see 40 percent growth in rich residents while both Los Angeles and New York will increase by 30 percent.

Los Angeles offers the largest homes

Even though Miami has the lowest price-per-square-foot, homebuyers in Los Angeles receive the most home for their money. The average size of a luxury home bought in Los Angeles was 11,211 square feet. Even though the average home smaller than in Miami, the surrounding area is far larger. In fact, properties in Los Angeles were often accompanied by two and half acres of land. Compare that to the 1 acre in Miami and the (mere) 4,276 square feet of outdoor space found in Manhattan apartments.

The most popular neighborhoods

Where exactly are these foreign investors buying their property? In Miami they opted for North Bay Road, Palm Beach, and Miami Beach. In Los Angeles the preferred options were Malibu and Beverly Hills. Meanwhile, most of the purchases in New York came in Tribeca, Greenwich Village, and the Upper East Side.

Why luxury real estate offers value and opportunity

One of the reasons that the current luxury real estate market offers value and opportunity to foreign investors is due to the currently weak dollar position,  making investments more attractive than they have been in years. The aforementioned locations were leaders in income producing properties, waterfront homes, and luxury condominiums.

Another benefit that is often overlooked is the fact that it is considerably less complicated to buy property in the United States than it is in the vast majority of the world. Because commissions are often paid by the sellers, a prospective buyer does not pay real estate commissions.

The future is bright (for investors)

Given that the aforementioned locations already have reached a certain level of development and are not likely to increase in area, we fully expect that these cities are only going to see the overall value climb. This is a booming market that shows absolutely no sign of slowing down (instead it is doing the opposite). Given that we do not expect the dollar to become far stronger in a relatively short amount of time and we have three locations that are not only attractive now, but are also solid investments for the future.

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real estate, US real estate, live in the US, international investors, New York, Los Angeles, Miami