This content was published on February 19, 2021 – 18:24
Miami, Feb 19 (EFE) .- Latin American investors are again looking to invest in real estate in the US to take advantage of the appreciation of the real estate market and benefit from low interest rates in an environment marked by the most positive attitude towards Latin Americans from the Joe Biden Administration.
To the surprise of many, the pandemic did not wipe out the international real estate market in the United States.
“It has been an unimaginable surprise for me to see that my sales have increased since the pandemic began,” said Alan Medellín, who from Bogotá (Colombia) sells furnished apartments in a resort called The Grove Resort & Water Park, near Walt Disney World in Orlando, Florida).
THE PANDEMIC GIVES GOOD SURPRISES
“Suddenly clients began to reach me, not only from Colombia but also from Mexico, Argentina, Peru and Chile,” says the real estate agent in statements provided by the communication agency Top of Mind.
Medellín highlights that “the fact that today we can do virtually everything, from showing a property to closing the purchase, has opened many markets for us.”
“With the disaster that the pandemic unleashed, investors from all over the region tell me that their only option is to invest in bricks and dollars because that gives them more security and peace of mind,” adds Medellín, whose sales have risen 180% compared to the period prior to covid-19.
In part, that’s due to incentives that US developers have created to attract international buyers.
For example, The Grove offers a guaranteed return program and a subsidized dollar program, in which a discount is made in the exchange rate that benefits the investor.
According to Medellín, many of its clients in Latin America are seeking to invest in a more stable economy, since in their countries the pandemic has created a deep economic crisis.
The US was also hit hard and its economy contracted by 3.5% in 2020, the biggest drop since World War II, but still, it does not compare with the economic contraction suffered by Latin American countries. .
For example, Mexico saw its GDP fall by 8.5% in 2020 according to official figures, the projections for Colombia and Argentina are for falls of 6.9% and 10.4%, respectively.
FLORIDA AND ITS THREE GREAT DESTINATIONS
Florida, more than any other state in the US, relies heavily on the international market for real estate sales.
Miami, Orlando and Tampa are the top three destinations for foreign buyers, according to Florida Realtors, an organization of real estate agents.
Venezuela, Argentina and Colombia were the Latin American countries that bought the most properties in Florida between August 2019 and July 2020, according to Florida Realtors.
In total, foreign buyers from around the world invested 15,600 million during that period, which is 2% less than the 16,000 million invested in the previous 12 months.
Since June, the demand for residential properties in Florida has exploded, causing a rapid appreciation of real estate.
Nationwide sales in 2020 reached their highest level since 2006, according to figures recently released by the National Association of Realtors.
In December alone, sales of single-family homes, townhouses, condominiums and cooperatives increased 22.2% compared to the same month in 2019.
PRICES GO UP QUICKLY
This demand is causing a rapid appreciation of properties. In Orlando, property prices are expected to rise 5.8% this year, according to Relator.com.
Another reason why there is an increase in purchases in the US is the fact that interest rates are at a historically low level. That is leading international buyers to take out loans in the US to extend their purchasing power.
“Foreign buyers can get an interest rate between 3.625% with a down payment of 40% of the property’s value and 7% with a down payment of 30%,” said Melissa McGlinchey, manager of the Florida International Funding Orlando branch. in statements supplied by Top of Mind.
“The most important thing to get financing – he added – is to be able to demonstrate where all the funds that are going to be used for the transaction come from. All loan programs for foreigners require the tracking of those funds for a period of 60 days.”
THE BIDEN EFFECT
Another reason to invest in the US is that investors from Latin America feel welcome again with the Joe Biden Administration. His predecessor, Donald Trump, had a rough relationship with the region and his government caused mistrust.
Luz Barragán, who resides in Cali (Colombia), bought a furnished apartment in The Grove (Orlando) and now that Biden is president, she is thinking about probably buying another apartment in 2022, she told Top of Mind.
“If Trump had won, I would have sold my investment because the US was going to dictatorship,” said Barragán, who is investing in the US so that his adult children can benefit from that inheritance in the future. .
Barragán decided to buy in Orlando for the theme parks and, thus, be able to stay on his property when he goes to Disney with his children and grandchildren in the future.
“What I liked the most about this investment opportunity is that The Grove guaranteed me a fixed return and, in addition, I fell in love with the resort when I saw it,” Barragán said of the vacation complex, where apartment prices start at $ 196,000 . EFE
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