Due to the travel restrictions during the pandemic, international buyers were considered largely absent from the U.S. luxury residential real estate market. Between April 2020 and March 2021, they purchased $54.4 billion of real estate, the lowest amount since 2009. Now, however, we are seeing a comeback in activity from foreign buyers and investors, as reported by The Wall Street Journal.
A combination of events have brought back the activity. The end of travel restrictions, geopolitical events like the War in Ukraine and election tumult in Brazil, and the end of China’s zero-covid policies.
John Gomes of Douglas Elliman describes how it was the domestic buyer that led the market out of recovery from the pandemic, and it is the foreign buyer who is leading the market out of recovery from inflation and rate uncertainty.
Many see the U.S. economy as a safe place to invest, according to the Wall Street Journal. They seek to diversify their assets into the U.S. economy, potentially as a currency hedge. The current headwinds facing the U.S. economy are seen as an opportunity to enter at an accessible price.
This could help explain the recent uptick in activity I noted in my exclusive newsletter to my clients. Plans to diversify or invest in luxury U.S. real estate that were put on hold due to the pandemic are now back in action
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