Tag Archives: global real estate investment

Sotheby’s International Realty Expands Asian Real Estate Network

Sotheby’s International Realty currently has an office in 13 of the 20 top real estate markets worldwide. In the company’s latest move to remain the preeminent luxury real estate network worldwide, Sotheby’s International Realty announced plans to expand the company’s network of real estate affiliates in the Asian market.

Michael R. Good, chief executive officer of Sotheby’s International Realty Affiliates LLC says the real estate market in Asia is the company’s number one focus for growth in 2012: “The economic growth and the emerging leadership of Asia in the world economy mean significant opportunities for referral business throughout the world for our network. Our first priority will be to identify potential affiliates in China, India, Australia, Singapore, South Korea and other key locations in the Pacific Rim.”

Sotheby's International RealtyAmong current brand affiliates in Asia are Hong Kong Sotheby’s International Realty, Vietnam Sotheby’s International Realty, Hunter Sotheby’s International Realty in Thailand, Japan Sotheby’s International Realty, New Zealand Sotheby’s International Realty, and Taiwan Sotheby’s International Realty.

The Sotheby’s International Realty brand has a current network of over 12,000 agents, in over 580 offices, in over 42 countries and territories worldwide. New affiliations will only be granted to brokerages and individuals meeting the same strict qualifications current affiliates met when they first joined the Sotheby’s International Realty brand.

An expanded management team in the region will create a hub in Hong Kong to support growth in the region and service the needs of the growing network. The Hong Kong hub will also allow the regional affiliates to leverage an already close working relationship with the Sotheby’s Auction House in Hong Kong.

For more information on the expanded Asian real estate network of Sotheby’s International Realty, see the press release from Market Watch.

For information on how this expansion benefits both Asian investors looking to invest in United States property and American investors interested in investment property in Asia, contact our Realtors.

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Cash Buyers Make Up Over 50% of Boston Property Sales

A couple weeks ago, I ran across the stat that 38% of recent real estate transactions nationally were paid in cash compared to the 18-20% of residential real estate transactions usually paid in cash. I posted the stat to my social media channels and this led to a dialogue with a couple of people about what we could take from the stat.

One commenter”s opinion was the increase was the result of foreclosures. His logic revolved around prices having fallen to a level within reach of larger number of peoples’ savings. I said I’d see if I could find some additional statistics breaking down the numbers by location and purchase price.

The rise in real estate transactions paid in cash can be attributed to investors buying distressed property (short sales and foreclosures) in some parts of the country, but it is not the only factor.

The downtown neighborhoods of Boston, which made it through the housing crisis relatively unscathed, have seen cash transactions make up over 50% of all real estate transactions so far this year. The increase in home buyers paying cash has increased each year since the housing crash, from 28% of all real estate transactions in 2008, to 29% in 2009, 31% in 2010, up to 48% in 2011.

In Boston, cash buyers are not uncommon at higher prices. The percentages vary, but cash transactions make up a large percentage of the city’s high-end sales. Boston’s most expensive real estate transaction in the last year, a penthouse at the Mandarin Oriental, was bought in June for $13.2 million in cash.

Wealthy investors looking for a place to invest excess cash gravitate toward real estate as the stock market remains volatile. Property in Boston appears safe in comparison, especially since it is a market that has remained steady during the economic turmoil.

The view of Boston property as a safe investment has also attracted international investors. A recent study found 50 percent of real estate investment is concentrated in 30 cities and Boston ranked 18th on the list; considering Boston’s geographic size, this is オンライン カジノ a significant statistic. Canada, China, Brazil, Russia, and Europe are all sources of buyers because they view property in the United States as a safe investment. These foreign investors are cash buyers out of necessity because they do not qualify for financing without credit history established within the States.

Real estate transactions paid in cash are on the riseForeign buyers have been buying investment property at all price points and these overseas investors are one reason we are seeing cash transactions across the purchase price spectrum. The mid-price and lower-price real estate transactions in Boston have not been cash purchases historically. This unusual activity is the main reason cash transactions have made up over 50% of all real estate sales this year.

Tightened lending regulations have also contributed to the historically high percentage of cash buyers in Boston. More buyers are having difficulty obtaining financing, but even if a homebuyer has no problem getting financing, the property may present challenges because lenders deem it non-warrantable. Some common reasons for lenders to refuse financing are low owner occupancy (under 50%) in a building, too large of a commercial interest (over 20%) in a condo association, ongoing litigation, low pre-sale in a development, a home owners” association with budgeted reserve allocation less than 10% of operating revenues, and an appraisal price being too far below the proposed purchase price of a property. A cash purchase is often the only option if a property meets one of these criteria.

Buyers capable of making a cash offer are aware of the current lending environment. These buyers know they can often secure a favorable deal because sellers who have seen transactions fall apart because of financing might take a lower price rather than try their luck with a buyer seeking financing.

Two other factors contributing to the rise in cash transactions are empty-nesters and “kiddie condos.” Baby boomers who have been downsizing and looking for a more walk-centric lifestyle are buying Boston condos with profits from selling their suburban homes. Another demographic of cash buyer is affluent parents buying “kiddie condos” for their children who are attending one of Boston’s universities since the current market is shifting toward buying being more affordable than renting for the same period.

The market continues to improve and not only for those who can afford to pay cash. For a more detailed explanation of current real estate market trends in Boston, to discuss the ramifications of cash versus lender financing, or to explore if investment property is right for you, contact the Realtors of Matthew and Alisa Group Real Estate.

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