Pandemic unlikely to kill demand from foreign luxury buyers

The pandemic’s chaos has upended many parts of the economy, but luxury agents believe international buyers will still gravitate toward the relative safety of the U.S. market.

The coronavirus pandemic has been ravaging the economy for over two months now, but despite the chaos numerous high-end real estate agents do not believe the crisis will turn luxury international homebuyers away from the U.S. market.

Agents across the country recently spoke to Inman about the impacts the crisis is having on luxury markets. Though they all envision a reshuffling of sorts, with concerns about disease and isolation making some features more attractive than others, they also generally agreed that international buyers will remain interested in the U.S. for any or all of the following reasons:

  • U.S. real estate remains a bargain compared to some other countries.
  • Other international markets have also suffered from the pandemic.
  • There are certain lifestyles that are only possible in specific parts of the U.S.

Mark Lowham

Mark Lowham — CEO of TTR Sotheby’s International Realty and a member of the board at Mid-Atlantic multiple listing service Bright MLS — was among those who argued that international buyers will remain drawn to the U.S. for the deals it offers. He noted that in particular Washington, D.C., should remain appealing because “it is a relatively good value,” compared to other political and economic capitals like London, Paris or Abu Dhabi.

“And all of those cities have had their own version of the pandemic going on,” Lowham told Inman.

Michael LaFido

That idea — that other major centers have experienced pandemics as well — was another recurring theme in conversations with Inman. Michael LaFido, with @properties in Chicago, said that despite the number of cases, the U.S. remains a comparatively secure place compared to other parts of the world — and international buyers know that. Moreover, he argued that because the pandemic hit so many countries, the “field has been leveled” for many buyers considering where in the world they want to live.

“I think safety, security and healthcare is going to be a priority,” he said. “All these other countries were affected as well. Everybody is dealing with the same issues.”

Dawn McKenna

Dawn McKenna, who leads a Coldwell Banker team and works in both Chicago and Florida, made a similar point, saying that the pandemic may ultimately have a positive impact on international buyers considering the U.S.

“I think they’ll see the U.S. economy roar back faster than any other country in the world,” she told Inman. “They’ll see that the U.S. is a safer haven.”

Many of the real estate professionals who spoke with Inman noted that activity from international buyers has recently slowed in the U.S. A report last year suggested that trend had to do with a slowing global economy and a lack of supply.

That trend may well continue, but the agents who spoke to Inman argued that either way the pandemic won’t be a factor in exacerbating it. The international buyers who were looking at the U.S. will remain interested, most agents agreed.

In addition to prices and the global nature of the pandemic, some also said that the appeal of the U.S. hinges on the uniqueness of its markets.

Billy Nash, for example, who leads the Nash Group in Florida, told Inman that he doesn’t anticipate any reduced demand from international buyers in his market in part because people want to be in warm and beautiful places while isolated. Florida has such places in abundance, but that isn’t the case with other parts of the world.

Michael Nourmand

Michael Nourmand, President of Nourmand & Associates Realtors, agreed.

He argued that Los Angeles may be similarly resilient because its neighborhoods are well-known, and unique.

“Beverly Hills, Bel Air, those are neighborhoods that people are always going to want,” Nourmand told Inman. “Pandemic or no pandemic.”

Email Jim Dalrymple II