The trend of purchasing sight-unseen real estate is flourishing in a way that it hasn’t in years. After the housing bust, buyers became extremely wary of investing off plans alone, particularly after several high-profile developments went under while still in construction phases. Purchasing real estate in this manner became practically obsolete.
However, buyers are currently returning to the market with a renewed frenzy, especially in higher end markets
such as Manhattan, Miami, San Francisco, and the Sonoma
and Napa Valley.
Foreign buyers have much to do with this trend of ponying up millions for sight-unseen real estate investments, which is continuously spurring on developers to bring to market new buildings that sometimes are months or even years in advance of the slated completion date(s).
One example of this is One57
, one of the priciest projects in Manhattan, that won’t be finished until next year. 70% of the units are already sold with total revenue expected to be over $2 billion.
Kelly Kennedy Mack, President of New York-based marketing and sales company Corcoran Sunshine Marketing Group
, says “Today we see presales as early as two to three years away from completion.” It is becoming increasingly common to buy high-end real estate based off marketing presentations and blueprints alone.
Another reason presale, sight-unseen real estate offerings are becoming a more and more attractive investment trend is due to the fact that inventory levels are very low and quite competitive. Sales volume is rising by close to 20% while available unit averages are at an almost all-time low.
In a market that is rising, those in the buying seat are less tentative of running the risk of a building going under. Instead, they are much more interested in the opportunity to guarantee a lesser price point and jumping at the opportunity to snag their piece of this often elusive pie.