US Homes

International purchases of American homes are ramping up, and a new Senate bill designed to boost the ailing real-estate market would encourage globe-trotting investors to buy even more.

The bill, co-sponsored by Charles Schumer (D-N.Y.) and Mike Lee (R.-Utah) would grant a U.S. visa to international investors who agree to spend at least $500,000 on residential real estate here.

If passed, the legislation could add to a surge in homebuying by international purchasers over the past year or two that’s already given some local U.S. markets a welcome boost.

Growing international interest

Foreigners spent $82 billion buying up U.S. homes in the 12 months ended in March, up 24% from a year earlier, according to the National Association of Realtors (NAR). That represents 8% of total U.S. sales.

In places like South Florida, international buyers already account for a whopping 25% of the market. California, Texas and Arizona also attract many foreign buyers, as do Hawaii and New York.

South Florida condo sales have been surprisingly strong, said Brad Hunter, chief economist for Metrostudy, a housing analytics company. “And the majority of those sales are to South Americans and Canadians,” he said.

Your local forecast

All that international buyer activity has been a tonic for the anemic Florida market. Housing starts were up nearly 20% in the three months ended Sept. 30, according to Metrostudy.

In Manhattan, there’s been a steady baseline of foreign condo buyers, said Jonathan Miller, CEO of Miller Samuel, a New York appraisal firm. They generally account for about 15% of investors, but in recent years, the buyer mix in New York City has shifted, he said.

When the euro was strong in the mid-2000s, buyers from Western Europe — and particularly Ireland — dominated.

The Irish “economy was so strong back home — the ‘Celtic Tiger’ years — that many were flush and wanted to invest and take advantage of the spread between currencies,” said Miller. “There were marketing groups that would go to Ireland and sell packages of condos here.”

Now, said Miller, the New York market now attracts more Asian and Latin American buyers than in the past.

Wei Min Tan, a real-estate agent with Charles Rutenburg Realty who specializes in selling Manhattan real estate to Asians, said his volume has more than doubled this year.

“I tell [buyers] it’s going to be a stable investment that should go up 10% a year,” he said. That’s “not as much as they might get in Hong Kong or Shanghai,” but there’s less volatility, he said.

Even better for homeowners, foreign sales can be very easy: The buyers are often affluent and buy more expensive homes. The median sale price of $175,000 they pay in Florida, for example, is well above the median sales price of $136,500 for all transactions.

There’s also no hassle over financing or waiting around for a mortgage lender to approve the deal: Overwhelmingly, international buyers pay cash.

Indeed, the Senate bill would require buyers to pay cash for the homes to qualify for the new “homeowner” visa. They’d also need to pay U.S. taxes and spend at 180 days a year in the country, and can’t work here or take out home-equity loans against the properties. In return, they’d get to live here for at least three years.

A vote of confidence

The program could improve the housing market nationwide, said Schumer.

“We think a very significant number of people will be brought in,” he said. “They’ll sop up the extra supply of homes we have right now that has been dragging down the economy.”

Foreigners seem to have more confidence in the U.S. real estate market than Americans do. Almost half of buyers surveyed by NAR cited the profitability or safety of their investments as the main factor that persuaded them to buy.

“With the economic distress in Europe,” said Miller, “people are still looking for safe havens for investing and the U.S. is perceived globally as safe.”

Plateau State government

Plans by the Plateau State government to add an additional Government’s House has yielded result as it has entered into a N 4.5 Billion contract with a construction firm for a befitting modern Government House construction about five kilometers from the present one.

As a result, the current one use in Rayfiled will be converted to a presidential lodge, the government said. At a brief but colourful ceremony at the Rayfield Government House, the Secretary to the State Government, Prof Shedrack Best signed the contract on behalf of the state Governor Jonah Jang with Mr. Noca Giacofo, Director of Eagle construction limited standing in for the company.

The SSG disclosed that the Presidential Lodge was converted to the present government House and the Tunde Wada Government lodge remains as such, saying the decision become necessary to meet the challenges of modernity.

According to him, “the state government had acquired the land and has been doing minor activities on the land towards the actualization of the Jang’s 10 point agenda, saying the new Government House is key to the actualization of the 10 point agenda.

He added that the pains of having a new Government House is worth it as when completed it will be the second to none in the country because it is going to house the governors’ office and residence, Office of the First Lady, Government House clinic as well as other office facilities.

Prof. Best urged the people of Plateau State to develop interest in the project by visiting the site which will make it a people’s project rather than seeing the project as strictly government affairs.

He described the project as a big one, noting that government was hopeful that Eagle Construction would deliver the project before the 36 months in line with Jang administration’s commitment to giving the people of Plateau State a befitting Government House that the administration would be remember for across the state.

The Director of Eagle Construct Limited, Mr. Noca Giacofo assured that his company would complete the project within the time frame, adding that they have been partnering with the state government on contracts.

“This is not the first time we are entering into such contract with the government of Plateau State. We handle the Plateau State liaise office in Abuja”, he said.

Block of flats at Igbogbo Housing Estate 11, Lagos

From Sir Otedola Housing Estate at Odoragunshin in Epe, to Ijaiye Housing Estate, Elegant Court in Ikota and Hon Rotimi Sotomiwa Estate in Igbogbo, Bayeku Local Council Development Area in Ikorodu within two months, Lagosians have been told to expect more housing projects by their governor, Mr. Babatunde Fashola.

“In the next two weeks, the government will begin work on another 80 units of one, two and three bedroom flats beside the existing Oba Adeboruwa Housing Estate in Igbogbo, Ikorodu,” the Commissioner for Housing in Lagos State, Mr. Bosum Jeje, who represented the governor, stated this during the inauguration of the estate in Ikorodu at last week. Governor Fashola said the housing units being commissioned were targeted at the masses, adding that his government would ensure that the houses are affordable. On the price and payment basis, the commissioner, urged people to wait for government to unfold the prices of the houses and the mode of payment.

He said the applicants would become proud owners of home after the 30 per cent advance payment with the balance spreading over a period of 10 to 20 years. “We are launching the mortgage system soon. It is then residents can pass judgement whether the houses are for the masses or elite, but I am assuring you that these houses are for the people and it is affordable in all ramification,” he said.

He said the government has already launched a website through which potential buyers can apply, adding that the state has enacted the Arbitration Rules to guide the transaction. Speaking on modality of achieving mass housing in the state during the commissioning of Elegant Court in Ikota at Lekki, Lagos penultimate week, Jeje, said the ministry has developed a template for appraising interested private developers as well as facilitating necessary sign-off from the relevant ministries and government agencies on behalf of developers. Jeje added that it is worthy of note that the Public Private Partnership is already yielding fruits as some of the partners have completed their projects while some have reached advance stages of work.

DAYO AYEYEMI