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Real Estate

Virtual reality next step to attract international home buyers?

Ex-Goldman Sachs partner thinks so

International buyers are a growing platform in today’s real estate market, and therefore could bring all new needs and trends to housing.

In fact, international homebuyers added over $10 billion to the Texas economy from April 2015 to March 2016, according to the Texas International Homebuyers Report released in September by the Texas Association of Realtors.

As international buyers are increasing, they are also bringing new trends to the market. For example, the Chinese influence is affecting home values for street addresses that contain the Chinese lucky number – four.

Now, even the way homes are sold may need to change. Jack Ryan, founder of REX, an online brokerage, former partner at Goldman Sachs and a onetime opponent of President Barack Obama for the Illinois Senate seat, decided to do just that.

Home prices continue to increase, a trend that will continue into 2017, according to a new report from CoreLogic.

These increasing home prices are narrowing the scope of possible buyers on luxury homes, and increasing the possibility that it will be bought by an international buyer. That is exactly what Ryan realized when he decided to turn to virtual reality to sell a $57.5 million home in Malibu, California, according to an article by James Tarmy for Bloomberg.

From the article:

“For homes like this,” Ryan said, gesturing to the house’s fireplace, “there’s a 50 percent chance that the buyer is outside the U.S., in around 15 financial capitals—London, Shanghai, Paris, Beijing.”

To reach that elusive group of the super-rich, Ryan had to get creative, which is why he decided to pay a virtual reality company to map the house and create an interactive video.

Virtual reality allows viewers to see the home as though they were really there by looking through a view piece strapped onto their head. Several different agents have begun playing with virtual reality as a tool for selling homes or condos, but is it working?

From the article:

The video, he said, has been useful, though he considers VR one of several marketing tools. “I couldn’t give tangible results, like 'five deals closed because we had VR,'” he [Adam Greene, vice president of residential development at Forest City Ratner] said. “I think it gives the whole experience of the sales center something a little bit different.” Indeed, multiple brokers all echoed the same point: VR is presently a tool that can get buyers excited, not an actual replacement for seeing the house in person.

Ryan’s virtual reality video cost in the low tens of thousands to produce, according to the article.

To see photos of the multi-million dollar home, click here.

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