The last two years have not been kind to many residential real estate markets around the world. The political turmoil in Great Britain as a result of the confusion over Brexit is taking its toll on the once-booming London real estate market. London, one of the world’s most expensive real estate markets driven by the influx of foreign buyers over past decade has seen sales volume drop by 59% in the past three years, and values are down 14% from their 2014 peak.

In Australia, the once hot decades old residential real estate market, is also experiencing sharp corrections in real estate values and volume. Prices in Sydney and Melbourne, once hot international markets, have seen prices fall 9% to 11% in the past year with another 8% drop expected in the next year. An overall decline in values of up to 25% are predicted before the correction runs its course.

Dubai, another international bell weather real estate market, has also recently experienced a decline in residential sales and real estate values of 25% to 45% since that market hit its peak in 2015. Multiple factors including political uncertainty, slowing international economic growth and increasing interest rates are causing these corrections in international real estate markets. 

But, despite the slowdown in some international real estate markets, the Aspen Snowmass real estate market seems on track for another strong year in 2019.

Aspen Snowmass is known as an international resort with international visitors representing about 8% to 10% of the total annual visitors to Aspen annual as reported by the Aspen Chamber Resort Association and the Aspen Skiing Company. So why hasn’t the Aspen Snowmass real estate market experienced some of the negative impacted hitting foreign markets? The answer may surprise you.     

According to the National Association of Realtors, foreign buyers accounted for 8% of the roughly $1.6 trillion of existing home sales in the U.S. in 2018. The Chinese were the number one foreign buyer buying roughly 25% of all homes sold to foreigners, followed by buyers from Canada, India, Mexico and the United Kingdom. Foreign buyers also tended to buy more expensive homes than U.S. buyers. The number of foreign buyers declined about 10% in 2018 from 2017 and is expected to decline further in 2019. The reasons most stated are the increasing real estate prices in the U.S., global economic weakness and political uncertainty.  

Foreign buyer activity is most focused in five U.S. states, Florida, California, Texas, Arizona and New York. Those states as you would expect are the ones hardest hit by the slowdown in foreign purchases. In south Florida, foreign buyers accounted for 19% of existing home sales last year, twice the national average, down from 21% the year earlier. New York City, another top destination for foreign buyers, experienced a slowing real estate market in the second half of 2018 with inventory increasing 12% during the year and prices declining on average 10% to 12% into the first quarter of 2019.

The reason this slowdown in foreign buyer activity hasn’t negatively impacted the Aspen Snowmass real estate market is that the presence of international buyers has very little impact on the Aspen Snowmass real estate market.

In the past three years, foreign buyers were responsible for only one percent of real estate sales in the Aspen Snowmass area. The busiest time for foreign buyers in Aspen Snowmass was from 2013 to 2015 when foreign buyers were responsible for roughly two percent of transactions. So despite being considered an international resort, the Aspen Snowmass real estate market is still predominately impacted by what’s happening in the U.S. This appears to be a good thing for the Aspen Snowmass real estate market. 

Lori Small is a luxury real estate broker associate with Coldwell Banker Mason Morse; and William Small, CCIM is the Founder and CEO of Zenith Realty Advisors, LLC, a commercial-investment real estate advisory and investment firm.

Lori can be reached at Lori@LoriSmall.com and William can be reached at William.Small@ZenithInvestment.com