She made an offer last January on a 415-square-foot, one-bedroom apartment in the coveted Golden Triangle area between the Champs-Élysées and the Seine, and closed in June 2022.

While the U.S. housing market has been slowing down — thanks to elevated home prices and mortgage rates — there’s been a growing trend of wealthy American buyers investing in overseas homes, buoyed by favorable exchange rates and a strong dollar.

“I think we saved probably close to $100,000 between the time we made the offer and the time we closed,” says Laurent, who’ll use the property as a vacation home and a space to host clients for her interior design firm, Laure Nell Interiors. The euro-dollar exchange rate plunged over 12% last year, falling below parity in August. While the euro has regained some of its value since, it’s still well below its 2021 rate.

Whether you’re a retiree looking to spend your golden years somewhere warm and tropical, or someone investing in a second home for some extra rental income, international properties are currently all the rage.

American buyers are buying properties abroad

The numbers show a clear trend. Coldwell Banker surveyed wealthy American buyers and noted that 67% of respondents own properties outside the U.S. According to Wealth-X figures, the number of high net worth Americans who purchased property abroad in 2022 was also expected to rise by 14% from 2021 and 29% from 2019.

Roughly 65% of U.S. realtor clients searching for a home overseas in 2022 were interested in a property to rent out or use as a vacation home, according to a 2022 report from the National Association of Realtors.

Kelly Cutchin, country manager USA at global payments services provider Moneycorp Americas, says some of these buyers may be looking for an investment property or vacation home, while others could be “jumping the pond” and looking to relocate entirely.

Central America is currently the top preference for affluent Americans, followed by Canada, Mexico, Asia, South America and Europe.

Some countries, like Portugal, also offer “golden visa” programs, in which wealthy individuals obtain residency or citizenship in exchange for a substantial investment, like in real estate.

The Trend report indicates that while the 55+ age group has the largest share of foreign property ownership, the 25-34 age group has moved up from last to second position.

Cutchin says this is due to generational wealth. “There are a lot more high net worth individuals (HNWI) under the age of 30 than before. These youngsters are looking to diversify their portfolios and starting young is almost never a bad idea.”

An October 2022 Bank of America study indicated that rich young Americans are looking to alternative investments, like real estate and cryptocurrency to boost their wealth.

Why overseas locations may offer more perks

Laurent says that aside from her apartment’s Haussmanian architecture, the declining exchange rate and low mortgage rates in France at the time made it an excellent investment. Even now, French mortgage rates are around 3%, while American rates hovering around 6.5%.

American home prices, inflation and the political climate may be contributing to buyers looking abroad. If you’re thinking of relocating to a different country, you could sell your home for a high price now and potentially score a lower price elsewhere.

The rise of remote work and social media posts with enticing photos and reels of different countries could also encourage buyers to look outside of the U.S.

Cutchin says some buyers may be motivated by others in their social circle buying homes overseas.

“We all have a bit of FOMO [fear of missing out], right? ‘Everyone in my country club is doing it — so I want to have that same status as Suzy, and so therefore, I too need to buy a property in Paris, and we can vacation together with our families.’”

What US buyers need to know

Cutchin says the most important thing is to do your research. Speak to a real estate agent and an international tax consultant, and look into foreign ownership laws.

In some countries, you may need to be able to afford an all-cash purchase. You could look into financing through your local bank or foreign mortgage products — but Cutchin says these can be limited and could require a larger down payment than what you might see in the U.S. “It’s not uncommon to see a deposit amount of upwards of 30%.”

You may also need to account for extra costs, like a translator, tax and legal fees, international bank transfer fees and insurance.

Laurent, who has dual American and French citizenship, went through a French bank to secure her mortgage and needed to purchase life insurance to protect her loan.

Although Laurent benefited from the exchange rate declining last year, Morgan Stanley foreign exchange strategists are predicting it to rise back to $1.15 by the end of 2023. You could consider speaking to a currency expert to lock in your rate before making an investment overseas — for example, Moneycorp allows clients to lock in an exchange rate for up to two years.

“Let’s face it, if the rate moves against you 10 cents between now and June of next year — when you go to actually facilitate that transaction — it might actually place you in a situation where you can no longer afford to make that investment, or you’re not as comfortable as you were previously,” Cutchin says.

Source: Yahoo! Finance

The post ‘We Saved Probably Close to $100K’: Rich Americans are Snatching up Prime Real Estate Overseas as The US Housing Market Slumps appeared first on Amora Escapes.

Austin metro ranked in the top 15 American cities with the highest property taxes, according to a report by Construction Coverage. The report ranked Austin-Round Rock-Georgetown at No. 13.

According to the report’s findings, Austin metro’s effective property tax rate for owner-occupied homes was 1.4%.

The report said the median property taxes paid for owner-occupied homes in Austin metro was $6,397, the median owner-occupied home value was $397,100 and the median household income was $86,530.

Other large Texas metros ranked in the top 15 were:

• Dallas-Fort Worth-Arlington at No. 6 with a 1.6% property tax rate
• Houston-The Woodlands-Sugar Land at No. 7 with a 1.6% property tax rate
• San Antonio-New Braunfels at No. 10 with a 1.5% property tax rate

Rochester, New York, was ranked at No. 1 with an effective property tax rate for owner-occupied homes at 2.4%.

According to the report, property taxes are usually calculated as a percentage of the assessed value of a property, an estimate that taxing authorities typically update every few years or when the property is sold.

Source :  Kxan

The post Report: Austin Listed Among Cities With Highest Property Taxes in US appeared first on Amora Escapes.