Commentary by John N. Vatistas
RISMEDIA, Dec. 31, 2007-Depending on where you live and work, they have already arrived. You might not see them but they’re there. The international buyer.
There was a time when real estate opportunities were localized. When people moved close to where they grew up and used the same agents their parents did. Agents who lived in the community. Who knew the community-from the inside. Agents whose sole specialty was those few square blocks or miles they farmed.
But during the past decade, much has changed. Fueled by employment opportunities, better ways of life, the Internet and investment opportunities, relocation has dominated real estate activity. Markets shifted as the real estate consumer needs shifted, but only a handful of real estate professionals and companies shifted with them.
The reason is simple — they didn’t need to. During these past ten years, homes sold before yard signs stabbed the dirt. As the real estate market sizzled, agents and brokerages didn’t see any reason to shift or change. Many took too much credit for their own success and never thought beyond the reality that maybe one day, their real estate lotto would end.
And that’s where we are today – in a cooled marketplace where skills, vision and foresight seem like a lost art while fear, confusion, panic and paralysis grip our industry. And that undoubtedly seeps out into the marketplace and to buyers and sellers.
Many in our market have seemingly run out of options. Despite Thomas Friedman’s depiction of our flattened, global marketplace in his best-selling book “The World is Flat,” many working agents and brokers today continue to remain steadfastly entrenched inside their local comfort zone, with global blinders and finding themselves unable to attract or locate the vast array of new opportunities that reside outside of their borders and well outside their perception. They are buried in the past encased in Styrofoam peanuts, postmarked 1995 and completely disconnected from the nuances that is real estate today. If you can’t cook, maybe it’s time to get out of the kitchen.
Today’s real estate consumer demands more. It’s not enough to simply list homes for sale in the local MLS, send Just Listed cards to local neighbors, and then wait for magic to happen. And it’s simply not enough to present yourself online with a tactically blind Web site that looks like a relic from the last century.
Sellers know it. Buyers know it. The press knows it. And a handful of top-tier real estate companies know it. One of the things they know is how hot the foreign markets are. They know where the buyers are, where they come from and what destinations in America they are targeting.
According to a recent study conducted by the National Association of Realtors, Canadian buyers made up 11% of all foreign buyers in 2006, a number that has no doubt increased this year. Incredibly, 47% of these Canadian buyers paid cash. Moreover, the Canadian dollar, long the second child of North American currencies, is now worth more than its American counterpart.
Mexico is providing another significant – if counterintuitive – stream of potential buyers. While much is written about Americans buying second homes in Mexico, few articles have noted the increasing number of affluent buyers from below the border looking north to the Valley.
The bottom line is that we live in a global economy. Opportunity is knocking from outside our borders in profound and astute ways. Some are looking at the market and see no yonder. Not to the north, the south, the east or the west.
Others are already there. Cultivating. Building. And thinking globally.
John N. Vatistas is chairman of Scottsdale, Arizona based Equitable Sotheby’s International Realty.