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According to any news channel on any given day, political unrest and economic turmoil seem to span the globe at an increasing pace. Given such a tumultuous climate, it’s easy to understand why real estate professionals may believe pursuing global business is a futile endeavor. But actually, quite the opposite is true.

According to the National Association of REALTORS® 2016 Profile of International Activity in U.S. Residential Real Estate, despite volatile conditions around the world, foreign investment in U.S. real estate remains strong, and geopolitical trends are sparking unexpected opportunities. Foreign buyers purchased nearly $103 billion in U.S. residential real estate last year, down less than $1 billion from the year prior.

“As a whole, this report shows that global real estate business in the U.S. gets a little bit better every year,” says Janet Branton, senior vice president, commercial and Global Services for NAR. “But this year’s report is much more interesting. It’s a report that you have to think about to understand. It’s not that the news isn’t good—it’s just good in a different way.”

A Shift in Foreign Buyers
Gay Cororaton, a research economist with NAR’s Research division who works directly on the report, agrees with Branton. “If you look at the number of U.S. properties bought by foreign buyers, there is an increase compared to last year,” says Cororaton. “However, there is a shift in the types of buyers.”

According to Cororaton, there are two types of international buyers: those whose primary residence is abroad and purchase property in the U.S. to use as investment or vacation properties; and those who are in the U.S. on work visas, as diplomats or recent immigrants. While the share of these two buyer groups has typically been split 50/50 over the years, last year saw a drop in the number of foreign residents investing in a secondary property in the U.S., making the ratio of the two buyer groups closer to 40/60.

Cororaton attributes this shift to weakening economies in many parts of the world. “Last year saw slowing growth in China, Canada and Latin America, and an overall economic slowdown in Europe,” she explains. “A collapse of oil production affected Canada and Latin America. These countries couldn’t export as much oil, which made purchasing a property in the U.S. more expensive. Plus, U.S. home prices are increasing steeply in certain areas because of a lack of supply.”

While a slowdown occurred in foreign resident investment, an increase took place among those in the U.S. to work and those who recently emigrated. “This makes sense,” explains Cororaton. “The U.S. economy is generating about 200,000 jobs monthly, and incomes are improving, albeit modestly.”

According to Branton, this year, the report also looked closely at U.S. properties being sold by their foreign owners. “Back before the recession, there was a lot of Canadian investment in the U.S., especially in Florida,” she says. “Between the increase in the value of the dollar against the Canadian dollar, and increased U.S. property costs, Canadians are now looking at selling their U.S. properties.”

What’s Driving Foreign Investment
For U.S. real estate brokers and REALTORS®, it’s critical to remember that although turmoil exists on a global scale, the U.S. is still viewed as one of the safest investment destinations for foreign buyers.

“Compared to the rest of the world, we still have a stable economy and government, and rental markets are healthy,” says Branton. “It’s a fairly easy process to buy here and property rights are strong. As an investment opportunity, the U.S. is a shining star.”

Certain factors continue to drive foreign investment, such as affordability. While home prices have escalated in U.S. hot spots, many metro areas are still relatively affordable to the foreign buyer—36 percent, in fact, say the U.S. is less expensive compared to home prices in their own country, while only 24 percent say it’s more expensive.

“Although prices are increasing in the U.S., rental vacancy rates continue to fall. If you’re looking for an investment, it’s tough to find places that would be better than the U.S., given the economic and political condition in other countries,” says Cororaton.

According to Hanne Sagalowsky, a REALTOR® in Texas and an NAR Global Liaison, building her global real estate business is all about personal relationships. “I made strong connections with a lot of foreigners several years ago,” she explains. “Whether they’ve lived in the country for a while or arrived within the last five years, the personal relationship and trust within the individual community is more valuable than anything else. They tend to ask friends and family members for recommendations more than looking at advertising.”

Another important trend in foreign investment involves those buying property in the U.S. because they have a child attending an American university. According to Cororaton, the Chinese comprise the largest segment of such buyers at 13 percent. Branton adds that for the second year in a row, China is the overall leader among foreign investors in U.S. properties, both in terms of dollar volume and number of properties purchased.

Of course, geopolitical events will continue to shape foreign investment in U.S. real estate as the year continues, and Branton and her team at NAR will continue to monitor the impact of everything from oil prices to mosquitoes. “When geopolitics happens, it affects economies, which affects housing markets,” she explains. “When the Brexit happened, for example, there was immediate panic and then things stabilized, but we don’t know—will this mean fewer UK buyers in the U.S.? Or does it make the U.S. look more stable than the UK and the European Union? We follow everything closely.”

The Full Reach of Global Business
While certain states, such as Florida, California and New York, rise to the top in terms of foreign investment, Branton emphasizes that there is global business going on in every state. NAR tracks economic development and demographics in each state, such as foreign businesses opening and languages spoken in schools.

The NAR 2016 Profile of International Activity in U.S. Residential Real Estate Data also reveals a significant number of U.S. residents who are looking to purchase property abroad. An increasing number of Americans who have family in other countries, aging baby boomers who may be looking to purchase retirement property in other countries or immigrants looking to purchase a vacation property in their home country are creating opportunities on the outbound side of the market.

Branton advises REALTORS® start taking advantage of global opportunities by reaching out to their local boards and associations. “There are more than 140 local boards and state associations that now have a global council,” she says. “They’re experts in finding pockets of international business within their communities and helping connect members to them.”

Branton, Cororaton and Sagalowsky also strongly recommend taking the NAR Certified International Property Specialist (CIPS) course.

“The CIPS designation is a very good starting point for educating yourself about how to be sensitive to other cultures and understand the differences,” says Sagalowsky. “You have to learn to listen more than you talk. You have to understand that your foreign client may be a very successful professional, but doesn’t understand the U.S. transaction, so they tend to be—and should be—very cautious. They will rely on you overall more than the average American consumer. More will be required of you, and it should.”

As Branton says, “There’s global business going on everywhere. You just need to be able to open your mind and be able to see it, and figure out how to connect to it.”

Tips for Working with Foreign Buyers…at Home and Abroad
Roll out the global welcome mat to foreign clients by keeping the following in mind:

– Be prepared to provide more financial guidance, and be able to explain all fees.
– Have an understanding and appreciation of their culture.
– Know that foreign buyers typically work through referrals.
– Be prepared to help them understand tax implications.
– Provide a timeline for the necessary paperwork and documentation.
– Be aware that many foreign buyers will use cash.
– Know the rental potential of the property.
– Most importantly, remember that their needs and concerns are much like any American buyer.

For more information, please visit http://www.realtor.org/global.

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