REALTORs®are constantly inundated with statistics. Trying to make sense of it will often make your head spin. There’s one report I love from Title Guaranty Escrow Services. It tracks where Hawaii property buyers come from. For instance, most of the sales occurring in our state happen between Hawaii residents. California residents comprise the next largest block, followed by Washington State.
Photo courtesy Stewart Miles/Freedigitalphotos.net
No surprise here, right?
Always surprising is that the group is rounded out by:
- #4 Texas (no income tax and far from our shores)
- #5 Colorado
- #9 New York (really far but cold…perhaps not a surprise)
- #10 Florida (again, no income tax, often similar weather, and really distant)
The motivation doesn’t always make sense. More logical are Oregon, Alaska, and Arizona. The entire report can be viewed here.
As an agent, I understand how important it is to pay close attention to the origin of our buyers. These are our feeder markets. Networking with agents and targeting buyers from those markets is essential. It’s important for me to understand the strength of those feeder markets.
What About Foreign Buyers?
Title Guaranty also compiles information about where foreign buyers originate. Interestingly, this set of buyers isn’t consistent for each district of Hawaii Island. Canadians are still buying Kona, Kau, and South Kohala, but surprisingly, (at least to me) Saudi Arabians and Chinese (at least during the most recent months) are buying Hilo. Japanese, Canadians, and the UK are buying Puna.
I know of no local information that tracks the number of buyers who condition their purchase on participation in a federal program called the EB5 program. For the uninitiated, this program may at first seem a bit counterintuitive and perhaps a little shocking.
In 1990, Congress created an investor-based visa that creates the ability for foreign investors to obtain permanent resident status through significant investment and job creation. Basically, foreigners willing to invest $1 million/$500k with 10 jobs created in development or $500,000 in at-risk rural areas (I am told Hawaii County qualifies) are able to receive conditional permanent resident status.
These “investors” have no guarantee their investment will make money. Most don’t care. Often the attraction is the ability to access some of the best educational opportunities on the planet. Many want their children to be educated in our universities. Through companies set up as so called “regional centers,” investors are able to pool their money in order to create significant projects.
A quick look at the Hilo sales shows the sale to the Saudi Arabian buyer was for $500k and 2 from China totaled $1 million. Again, without being party to the transaction, it’s hard to know if they are EB5 participants. Puna purchasers don’t look like they met the threshold.
One article I read noted a Brookings Institute study showing that 5 billion EB5 dollars have been invested and 85,000 jobs have been created nation wide. While this number sounds really big, it seems there’s plenty of room to expand. There’s a huge waiting list and, naturally, lots of bureaucracy involved in approval!
For a broader discussion, go here or follow @kristoncapps on Twitter.