Europeans are more interested in California real estate than ever, according to a recent study by the real estate website, Trulia.
Based on global web traffic to view real estate listings on their site, Trulia reported the top 50 metro areas in the U.S. that Europeans are eyeing. Seven of the top 50 cities were in California, with Los Angeles coming in first and San Francisco ranking fourth.
first tuesday take: The resurgence of foreign interest in California real estate has to do with the confluence of two very powerful factors: anticipated shifts in global currencies (the Euro in particular) and the encouragement of foreign investment by newly developed U.S. housing policies.
Although California has long been a hotbed of foreign real estate investment due to its many desirable aspects, the current Euro crisis has given many Europeans another reason to think about investing their Euros in dollar denominated assets (read: California real estate).
Despite the fact that the Euro has fallen in value over the past six months, it is still trading stronger than the dollar. Since home prices in California remain weighted down by the anchor of the jobless Lesser Depression, Europeans looking to invest in California real estate can redouble their potential return on investment (ROI) by buying low and at a favorable exchange rate. [For more information on the role of exchange rates in foreign real estate investment, see the November 2011 first tuesday article, Wealth from other nations: foreign investments in California real estate.]
The lure of such an investment has grown even stronger over the past several months as fears over the collapse of the Euro continue. Yes, the dollar is technically weaker than the Euro at the moment, but its overall vital signs as a safe-haven currency are extremely strong, a condition that provides much-needed shelter for foreign investors fearing a Euro fallout.
To sweeten the pot further, Congress has introduced several bills that provide substantial incentives to foreigners looking to invest in U.S. real estate. Most notably, there is currently a bill in Congress that significantly expedites the visa process for foreigners who spend at least $500,000 on U.S. property. [For more information on the foreign investment bill, see the November 2011 first tuesday article, Foreign investors have money, want real estate.]
With this undeniable recipe for a boom in foreign investments in California real estate, real estate professionals would be foolish not to explore their options. Congress and the European Union have already written the bulk of your marketing package for you. [For a resource to create your marketing package, see the May 2011 first tuesday article, first tuesday Forms-on-CD Version 4.3 – your professional toolbox.]
re: “Buying the American Dream with Euros” form Trulia.com