By ANTHONY MARGULEAS Special to the Palisadian-Post The British are coming! There’s never been a better time for Brits and Europeans to buy a home in Pacific Palisades. Softening in the Los Angeles real estate market, combined with a 32 percent strengthening of the pound vs. the dollar since 2002, means that there are bargains to be had. It’s no surprise that the number of inquiries from Brits and Europeans about buying homes in Los Angeles is on the rise. Homes are staying on the market twice as long and many sellers are more motivated. With the British now being better off than Americans for the first time since the 19th century, according to the respected Oxford Economics consultancy, Brits have additional buying power. According to a study by the National Association of Realtors, about 20 percent of realtors sold a second home in the year ending April 2007 to a foreign buyer. A third of these buyers come from Europe, a quarter from Asia and 16 percent from Latin America. Sharp drops in the dollar against the Euro and pound have made homes in the U.S. much more affordable for Europeans. In February 2007, the dollar-to-pound sterling exchange rate was $1.95 to one pound. By November, the exchange rate had increased five percent to $2.05 to one pound, so a home selling for $2 million would now sell for $1.89 million with this added buying power. Added to this, there is less competition from U.S. buyers since it is harder to get financing due to the subprime fallout. Many Europeans have seen large increases in their home prices while U.S. prices have either stayed flat or come down. The Euro is doing even stronger against the dollar. In January 2007 the dollar to the Euro was at $1.29; by February 2008 it had weakened 14 percent to stand at $1.48 to the Euro. On a $2 million home (the average price for a Palisades home) that allows for $280,000 in additional buying power for those with Euros. California continues to be the No. 1 destination for Brits moving to the U.S.A. In 2003, for example, 9,527 Brits were issued Green cards, and California was the most prominent state of residence for these new green-card holders). The Palisades has become a special favorite because it is one of the only walking villages in Southern California. The small-town feel, the Sunday farmers’ market, the family-friendly atmosphere, the beach, and miles of accessible trails in the adjacent Santa Monica Mountains are a big draw to many people from the UK and Europe. Europeans love to walk and be active and what better place than Pacific Palisades? Last weekend I talked with Adam, a recent buyer here who came from central London (where real estate is the most expensive in the world, at $4,600 a foot!). He said he rented for a year here before he bought. ‘I chose the Palisades to be near the ocean, as that was a huge plus. Palisades real estate prices seem like a much better value when compared with London prices.’ A lot of people are crunching the numbers and realizing there are great buying opportunities on the L.A. Westside, especially in the Palisades. It’s an investor’s market, especially for overseas buyers. So will Mayberry and other local restaurants start gearing up for some Fish and Chips and Yorkshire pudding? (Anthony Marguleas is president of Amalfi Estates in Pacific Palisades. Contacts: (310) 573-4245, ext. 100, and am@LAestatehomes.com)
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