There's a new group of buyers in the U.S. real estate market: foreigners.
A weak dollar and relatively low mortgage rates have turned houses and other real property into the investment of choice for a growing number of people from other countries. Some see real estate as a better way to earn money than stocks or other securities, while others are interested in using the properties themselves.
Ana McColgan, of Donegal, Ireland, is in the market for a three-bedroom home in the metro Orlando area.
"We keep coming over there anyway, so I'd rather have it than pay for hotel rooms," said McColgan, who's married with two children. "Maybe we could rent it out to offset the cost of having it."
Lowerys USA, which specializes in helping British buyers find properties in central Florida, saw sales increase threefold last year to $15 million.
"There has been a tremendous sales binge going on here for about 15 months now," co-owner Roy Young said.
Historically, coastal areas have gotten the most attention from foreign investors; the East Coast was attractive to Europeans, while the West Coast appealed to investors from Asia. But the recent boom in foreign investment has included areas such as Atlanta, Chicago and Las Vegas, said Mark Levine, director of the Burns School of Real Estate and Construction Management at the University of Denver.
"We have seen this grow from coastal areas to major cities across the U.S.," Levine said.
A favorable exchange rate has been a big factor in the increase. The dollar has fallen significantly over the past three years against the 12-nation euro and the British pound. This week, a euro has been worth about $1.30, and a pound about $1.90.
"There is a sense that the falling dollar does make U.S. real estate more attractive because, relatively speaking, homes are more affordable than they are in other countries," said Walter Molony, a spokesman for the National Association of Realtors.
The weak dollar played a role in Howard Gould's decision to purchase a four-bedroom, three-bathroom home in Kissimmee, near Walt Disney World, for $260,000 last September as a rental-home investment. The Briton wasn't deterred by three hurricanes that had passed recently through the region.
"We bought at what we thought to be a good exchange rate," said Gould, a director of a turnaround and management company in Leeds, England. "We chose Florida because we like it there. We thought property, at least in that particular area, would appreciate at a fast rate."
Mortgage rates are also a draw. While 30-year fixed rate mortgages hit an eight-month high of 6.04 percent at the end of March, they have retreated since then and are still quite low by historical standards.
And the Internet makes it easier for foreign investors to look for properties in the United States and then market them to potential renters. Gould, for instance, offers images of each room of his Florida home on a Web site, along with a calendar of which days the property is available.
In 2002, the last year figure were compiled, the leading countries of origin for foreign investors of U.S. property was Japan, Canada, Britain, Germany and the Netherlands.
Canadian Brian Krausert's family owns a condominium in Hawaii, but they plan to sell it and purchase another one in cash this year. They tend to visit for several weeks during Christmas and Easter.
"I believe the Canadian dollar will grow against the U.S. dollar," said Krausert, president of Beaver Drilling in Calgary. "If the Canadian dollar becomes stronger against the U.S. dollar, the asset becomes cheaper for us to buy. The prudent thing to do would be to sell now."
Some German clients are looking at golf communities in Atlanta since "everybody is in love with golf now in Germany," said Sebastian Haase, an Atlanta real estate agent with Coldwell Banker.
Other German clients are thinking about purchasing homes in north Georgia's Blue Ridge Mountains.
"It looks a little bit like the Black Forest. There's a homey feeling," Haase said. "Prices are excellent up there."
While Las Vegas real estate has always been popular with international investors, particularly those from Asia, the new focus of foreigners has been on high-rise condominiums springing up around the area.
"They're looking at what good investments they can get, and of course a weaker dollar will enhance that aspect," real estate agent Crete Carey said.
The current conditions have made property in Phoenix more desirable for foreign investors, especially Canadians who for years have been major land investors in the area, said R.L. Brown, publisher of the Phoenix Housing Market Letter.
"In many cases they have been in effect the land bankers for the Phoenix homebuilding community," Brown said. "They have bought and held farmland or desert land to ultimately resell to homebuilders."
After four record years, U.S. home sales are expected to cool off in 2005 as the mortgage rate creeps up. The National Association of Realtors is predicting a 3.2 percent decline in the sales of existing homes and a 5.9 percent decline in new-home sales. But real estate experts said foreign investment in U.S. real estate should continue to grow because of the market's stability and the diversity of properties available.
McColgan plans to go to an expo in Belfast on buying homes overseas next month and has contacted a real estate agent in Florida to help her find a home.
"We hope in years to come to spend a couple months of the year in Orlando," she said.