More and more Americans are eyeing an escape to Europe.
Demand from international homebuyers has increased across Europe, brokers said in an August 3 market report from Berkshire Hathaway HomeServices.
Thanks to the strong dollar, many European countries became hot destinations for international travel this summer. But some people are seeking more than a vacation.
"This isn't an escape from COVID anymore," Marcus Benussi, a managing partner and general counsel at Berkshire Hathaway outposts in Rome and Lake Como, said in the report. "It's turning into a more permanent model for life and family decisions. More and more people are choosing to move to Italy as they focus on quality of life over anything else."
The US housing market has seen a swell of dramatic shifts in the past two years, marked by high prices and cutthroat competition for available homes. Now relatively higher mortgage rates have dinged affordability and recession fears loom, amping the uncertainty. In interviews and market reports, brokers have said that Americans are more willing to uproot their lives in the US for new ones in Europe. France, Italy, Greece, and Portugal are capturing the most attention from US buyers, according to a 2022 report from Sotheby's International Realty.
Brokers say Americans are considering western Europe for its more laid-back lifestyle, its beautiful vistas, and its less expensive homes. The rise of remote work allows for flexibility. Plus, for anyone making a salary in US dollars, Europe has become even cheaper this summer. In July, the euro dropped to parity with the US dollar; the last time that happened was 2002.
Stephanie Synclair, a 40-year-old entrepreneur, told Bloomberg in July that she had been paying $3,000 a month for a four-bedroom house in Atlanta. She had saved up $300,000 to buy a home, but had no luck in the Georgia capital's hot market.
Instead, she decided to move to Italy, purchasing a 3,100-square-foot house, the house next door, and an 800-square-foot storefront in the small Sicilian town of Mussomeli — all for 60,000 euros, or about $62,000.
"I would never have looked to buy in Italy if the market in the US hadn't been so crazy," Synclair told Bloomberg.
Sotheby's told Bloomberg that Americans were responsible for 12% of the brokerage's Italian real-estate purchases in the first quarter. In 2021, Americans made up just 5%. Sotheby's also told Bloomberg that requests from Americans looking to move to Greece jumped 40% between April and June 2022 compared with a year prior.
Ugo Bagration, Berkshire Hathway's head of business expansion in Marbella — a coastal city in southern Spain — said in the brokerage's summer report that he's seen an increase in US and Canadian buyers despite Spain levying higher taxes on luxury-property owners than its neighbors in the EU.
In July, Knight Frank, a real-estate agency, found that currency shifts mean US buyers effectively get a 16% discount in France. Knight Frank's July report also noted that French property searches from American-based buyers increased 37% from last year in the first five months of 2022. The searches primarily targeted Paris, Provence, the French Riviera, and southwestern France.
The number of website visits from international users to Sotheby's Paris site jumped 40% in early 2022 from the year prior, Paulo Fernandes, the managing owner of Paris Ouest Sotheby's International Realty, said in the Sotheby's report.
Another lure of Europe is how easy it is to immigrate to many countries. Greece and Portugal, for example, make it fairly easy for Americans — or residents of any nation — to settle into the country via its "golden-visa" programs.
In Portugal, a minimum investment of 350,000 euros, or $359,000, in real estate grants you a residency visa. Similarly, in Greece, a minimum purchase of 250,000 euros, or $256,000, grants you the same thing.
By: Jordan Pandy I Business Insider I August 9, 2022