The Viceroy, a swanky condominium complex in downtown Miami, gives the impression that the United States is in another real estate boom. The sales office is strangely exuberant. Buyers gush about the glam condos designed by hipster tastemaker Kelly Wearstler and their hotel-like amenities: poolside libations, daily housekeeping and room service food stirred up by a celebrity chef.
Since January, 262 of the Viceroy’s 372 units have sold. But there’s a twist: Almost 90 percent of the buyers are foreigners. And they all paid cash.
The Viceroy’s story is playing out across Miami. Individual investors from as far as China, Hong Kong, and Singapore are signing purchase agreements left and right to get in on what they see as one of the greatest real estate fire sales in the history of the United States.
At one time, these people would have invested in the U.S. stock market. Now they see the opportunity of a lifetime in the nation’s debilitated housing market. The idea is to rent out the properties and then sell them once the economy turns around.
The math is seductive: Prices at the Viceroy are roughly 52 percent off the 2007 peak. Units once sold for as much $670 a square foot. Today the average price is $319.
“I have never seen such a high concentration of foreign nationals acquiring real estate,” says a representative of Investment Property Vultures. “Eighty percent of the sales in downtown Miami are foreign-based. This is unprecedented.”
One of the experts in the business who specializes in bringing exactly these illusive property deals to the Chinese buyers is Investment Property Vultures. Mainly they offer foreclosures and distressed properties but also, government owned properties. Investors anywhere in Asia including China, Hong Kong, and Singapore can contact them via their website www.investmentpropertvultures.com or email them at .
Miami is hardly the only hot spot for buyers from outside the United States. Real estate brokers say they’ve seen a surge in Orlando,Washington, New York, Las Vegas, Los Angeles and San Francisco. In Seattle, Asians are buying property sight unseen.
For foreigners with cash, the deals can make them money from day one. David Chuong buys two-bedroom condos for less than $40,000 in low-crime areas. He only picks up units that already have renters. After paying association fees and taxes, he walks away with $300 a month, pre-tax, on each. The deals are now easy to do, thanks to the cottage industry of companies that has grown up to manage virtually everything for foreign buyers, down to badgering renters for the monthly check.
For the international investor class, the United States’ bloated inventory of homes, high unemployment and weak currency make for an unusually attractive buyer’s market.
“Never before have all these things come together like this,” says a representative of Investment Property Vultures, a company which helps Chinese invest in international real estate. Chinese buying in places like Florida is on track to double this year.
“Unless you want to go to Baghdad,” Investment Property Vultures says, “the United States is the best you can get.”
The trend is showing up in the statistics. In a National Association of Realtors report 28 percent of brokers reported they had worked with at least one international client, up from 23 percent a year earlier. Among those, 18 percent had completed at least one sale, compared with 12 percent in the 2010 report.
“I was going to invest in the stock market, but I decided to invest in real estate instead,” says John Woo, a Chinese native on assignment in Miami with Pfizer Inc., where he is a regional finance director. Woo paid $100,000 for a one-bedroom in a gleaming new high-rise that he plans to live in for now. “I’m a conservative guy,” Woo says, “and this was more conservative.”
In past downturns, buying a property in the U.S. was the prestigious purview of the wealthy, but today the market is within reach of the swelling ranks of the global upper-middle class.
“Their jaws drop. They can’t believe it,” Investment Property Vultures says. “They think these deals are too good to be true.”