Real Estate Column: International Influence on SF Real Estate
by Lance Fulford

Our hometown is not just our neighborhood but also a neighborhood that extends around the world. The fabric of our lives is touched daily by international friends and neighbors and not since the arrival of our connectedness on that thing called the “Internet” have we been affected in such a real way as we are today with the U.S. dollar trading at an all time low against many world currencies.

We lived through the dot-com money boom and today we have arrived at a place where foreign money is buying into our hometown as well. The U.S. Bureau of Economic Analysis reports that foreign direct investment in U.S. real estate increased by 45 percent from 2005 to 2006 with the majority of purchases concentrated in New York, California, Florida and Texas.

Now, at roughly $1,000 per square foot, San Francisco looks cheap compared to $3,000 a square foot in Singapore or $6,000 a square foot in Dubai (just two of the world’s current money hot spots).

This reminds me of the story of a friend from the Castro who went back to his hometown in Iowa for a family reunion. He told us upon his return to San Francisco that he bought a big, old Arts & Crafts house on his trip as though he was buying gum on the way out of the supermarket “because it was so cheap I couldn’t not buy it.” We have all had that feeling when comparing prices here versus other spots across the mid-section of the country.

Iowa may not be on the international community’s list of favorite world vacation spots, but San Francisco is. More so today than at any other time in our history, San Francisco is being looked at and bought into by visitors who may have been coming for years or just arrived on their first visit.

This reality is influencing the market and will continue to pick up speed now that Canada has a stronger currency than we do. (I predict their currency will continue to pick up value against the dollar based on fundamentals.) As their sunny southern neighbors, a second home destination looks even more appealing.

We look very appealing to foreign visitors as they view our prices with the added benefit of a purchase “discount” when using their currency. Just this past weekend, the visitors to my neighborhood open house were seven-to-ten percent foreign nationals.

Now more than ever, property owners who are considering selling need to have international outreach as part of their marketing strategy and employ a professional Realtor with international training and experience to handle the intricacies of cross cultural negotiations if they expect to achieve “the highest possible price.”

An international strategy should encompass internationally accessed web sites (the best have language and currency conversion capabilities), publications with international reach and appeal, outreach within local internationally focused organizations and outreach to foreign organizations with ties to our community.

Hiring an internationally trained and experienced Realtor is as much a necessity in today’s global market place as skillful integration of the Internet is in a marketing plan.

Too often the latest “buzz” words are thrown around without much substance, so look before you leap and ask pertinent questions about “hands on” international experience in marketing and negotiation.

Lance Fulford, MBA, has been a real estate broker since 1988 and a certified international property specialist candidate and a long-time resident of Eureka Valley. He works for Alain Pinel Realtors.

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