By Bridget McCrae
Report reveals significant opportunity for Massachusetts REALTORS® who put time and effort into working with the international market.
A recent National Association of REALTORS® report shows that international business is booming in Massachusetts, where agents and brokers who roll up their sleeves and learn the ropes of working with non-U.S. residents are reaping the rewards of their efforts.
“International real estate is everywhere right now and new foreign-born residents are moving into the state every day,” says Meli Morash, CIPS, a REALTOR® with William Raveis Real Estate in East Longmeadow and a member of MAR’s International Council Advisory Board. “They’re looking for everything from summer homes to commercial buildings, and they need experienced, reputable agents to help them achieve their real estate goals.”
Breaking It Down
In its Business Data for Engaging in International Real Estate Transactions in Massachusetts report, NAR found the growth in international buyers to be a natural offshoot of our increasingly global marketplace. International transactions— imports, exports, and capital flows—are substantial and growing. Along with the expansion of international trade and the internationalization of capital markets, the flow of people across borders has increased.
The demand for real estate in both the residential and commercial sectors has grown, both in terms of second homes as well as investment properties. In the report, NAR presented recent economic data related to international business activity directly associated with Massachusetts, particularly as linked to providing information to non-U.S. residents in terms of residential and commercial real estate.
The 2011 National Association of REALTORS® Profile of International Home Buying Activity report backs up that assertion and revealed that approximately 2.8% of national existing home sales involved non-resident foreign buyers. In addition, another 2.8% of sales were purchased by recent immigrants and foreign expatriates residing in the U.S. for business purposes.
When examining population demographics by birthplace in Massachusetts for 2000 and beyond, for example, NAR found that 42,866 residents were U.S. born (compared to 251,207 prior to 1980); 54,837 were naturalized citizens (versus 160,796); and 319,768 were non-citizens (compared to 37,027). Major languages spoken at home today in the state include English (1.92 million); Spanish (153,486); and Indo-European (277,613).
Movers and Shakers
As of the 2010 American Community Survey, migration statistics show that 86% of the state stayed in place (non-movers) and 13.9% moved. Of those movers, 8.2% moved from the same county, 2.6% moved from the same state, and 2.1% moved from a different state. Just 0.9% moved from abroad, for a total of 1.68 million non-U.S. citizens.
NAR also reports that the number of admitted immigrants to Massachusetts has fluctuated since 2001, growing from 28,847 then to a current 31,069. Those numbers correspond to the national levels, which found the number of admitted immigrants across the U.S. increasing from 841,002 in 2001 to 1.13 million in 2010. The top origination regions and countries in 2010 on a national basis include Asia, North America, Europe, South America, and Oceania.
Kevin Santos, Chairperson for MAR’s International Committee and a real estate consultant with Ardent Residential Brokerage, LLC, in Hudson, says the NAR report spells good news for agents and brokers that are doing business in—or looking to do business in—the international marketplace. “We’re definitely seeing a large influx of both foreign nationals and immigrants buying in the U.S.,” says Santos. “The international market is clearly a fast growing area.”
An Eye on Homeownership
As the NAR report indicated, Massachusetts is home to a growing Asian and Canadian (NorthAmerica) population. Santos says that for agents to capture such buyers they must familiarize themselves with the origins, culture, and reasons for moving to the state. With a national homeownership rate of about 80%—about 14.6% higher than the average U.S. buyer—Santos says foreign buyers make excellent long-term clients.
NAR says international transactions can also play a key role in helping to close the early-year “homeownership gap,” and reports that many agents have already realized the potential business opportunities. Over the last five years, in fact, almost half of NAR members indicated that they have participated in a transaction involving an international element.
Expect those participation levels to grow over the next few years. “As the U.S. becomes even more of a globalized economy,” says Santos, “we’re going to see larger movements between all continents and across the global economy.” Morash concurs, and says that the more REALTORS® educate themselves on foreign customs, cultures, and buying habits, “the better positioned they will be to tap into the growing opportunity.”