Anyone who watches the currency markets (or the news for that matter) knows that we've been seeing some pretty big currency moves lately. There's been a strong appreciation of the Dollar against many other currencies and the Euro has been getting hammered.
If you work a market popular with international buyers, you're probably seeing the effects of this. Not too long ago, the weak Dollar meant big "discounts" for buyers converting from stronger currencies. Lately the table have turned. Noah of of the NYC real estate blog UrbanDigs did a good post on the subject last week. He notes:
... the volatile currency moves are resulting in a decline of purchasing power for those foreigners converting Euros to Dollars when closing their transaction. In short, these guys can't buy nearly as much for their Euros as they could have just 7 months ago. On the flip side, this could make previous Euro investor-owners holding Manhattan property more inclined to sell to take advantage of the currency rise in their dollar based asset - especially if they bought near peak and are expecting to take a loss. The loss in the trade of the asset might be offset by the recent gain in the dollar against their local currency. Interesting.
Obviously beyond simply timing the market, there are various tactics that international buyers and sellers can use to hedge against undesired currency fluctuations and minimize loss or maximize gain.
If you are a Member and are interested in this, you might want to check out our webinar May 25th on Financing Options for Affluent Buyers. Laura McLoughlin of the foreign exchange firm Moneycorp will be on hand to discuss some of the ways that international buyers and sellers can get the most for their money in transactions that involve currency exchange.
