When news broke Sunday that the list of countries on President Trump’s latest revision of the U.S. travel ban included Venezuela, a shudder rippled through Miami’s real estate industry.
“There was a lot of confusion at first,” said Eli Santurio, The Keyes Company district manager of sales in Doral, where 32 percent of the Hispanic population is of Venezuelan descent. “I had to send an alert to all my associates in the office to calm people down. We have a lot of clients, especially cash buyers, who rent out the properties they own here and live comfortably in Venezuela, because the exchange rate is so strong.”
The scare turned out to be a false alarm. Yes, Venezuela is one of the eight countries named in Trump’s new travel proclamation suspending entry into the U.S., which goes into effect Oct. 18 (the others are Chad, Iran, Libya, Somalia, Syria, Yemen and North Korea).
But the ban only affects “officials [and their immediate family members] of government agencies of Venezuela involved in screening and vetting procedures” such as the Bolivarian National Intelligence Service.
Just the fact that there’s a ban — and it’s making headlines — has a lot of developers concerned.
Danny Hertzberg, a Miami Realtor
According to the proclamation, Venezuela was added to the list because “its government fails to share public-safety and terrorism-related information adequately, fails to satisfy at least one key risk criterion, and has been assessed to be not fully cooperative with respect to receiving its nationals subject to final orders of removal from the United States.”
Most Venezuelan citizens will be able to continue to enter and leave the U.S. at will. But some members of Miami’s real estate industry are still wary the ban could have repercussions.
“Any changes in Argentina, Brazil or Venezuela make a direct impact on Miami, because we are so dependent on them,” said Danny Hertzberg, a Realtor with The Jills at Coldwell Banker. “As the ban stands right now, it’s limited to certain government officials and their immediate families, so it wouldn’t affect someone who does business with the government.
“But if the scope of the ban is widened, or if scrutiny is increased, it could send a lot of the buyers to look in other markets,” Hertzberg said. “Just the fact that there’s a ban — and it’s making headlines — has a lot of developers concerned.”
Mid-range and affordable housing in Miami remains scarce. But the overstocked luxury market relies heavily on foreign investors to snap up those multimillion-dollar mansions and penthouses — and the number of buyers has been waning.
The results of this year’s annual real estate study by Bendixen & Amandi International and the Herald, announced in July, showed 29 percent of total buyers of Miami real estate were from outside the U.S. — down from 56 percent in 2015 and 33 percent in 2016.
Venezuela accounted for the largest share of those foreign buyers — 19 percent. Brazil was second, with 16 percent.
"The Venezuelan people are starving and their country is collapsing," President Donald Trump stated before the United Nations on Sept. 19, 2017. He later called on other countries to do more to address the crisis in Venezuela under the dictatorship of Nicolas Maduro, which "has inflicted terrible misery and suffering on the good people of that country."
According to the Miami Association of Realtors, Venezuelans spent $930 million in real estate in 2016 throughout Miami-Dade, Broward, Palm Beach and Martin counties — up from $915 million in 2015.
But some believe Venezuela’s importance to the local real estate market has plateaued, dampened by the political and economic crises buffeting the country.
“Their overall impact has waned,” said Mike Pappas, president of The Keyes Company. “Three years ago was the peak of the Venezuelan buying. Recently it’s become more difficult to people to get their money out of the country, so they’ve had less punch in the industry. This travel ban is just another blow.”
Others say those same political crises have actually stimulated Venezuelan buyers.
“Venezuela is always one of our leading countries because of flight capital, from Chavez all the way to now with [President Nicolás] Maduro,” said John Warsing, officer of Verzasca International Realty. “Miami is obviously the market they most want to come to.”
Roger Bernstein, a partner at the national law firm of Saul Ewing Arnstein & Lehr, says a careful reading of the travel ban proclamation says there’s only one line in the document regarding Venezuela that should give anyone pause.
“There’s one sentence that says, ‘Further, nationals of Venezuela who are visa holders should be subject to appropriate additional measures to ensure traveler information remains current,’ ” he said. “That’s the only clause that’s of any concern. But it doesn’t suspend their travel. It just wants to make sure it verifies their identity properly. It’s the least restrictive of all the countries that are prohibited. The proof will be in the implementation. But I think it will have minimal affect on the market.”
Venezuela’s inclusion in the proclamation could even turn out to be a boon for Miami’s real estate, stimulating nationals who were already considering relocating here to finally make the move.
“We’ve actually seen an increase in inquiries from Venezuela since the new travel ban was announced,” said Ken Krasnow, executive managing director of Colliers International. “People understand there may be short-term implications associated with the new travel rules. But it also speaks to a longer-term instability in their homeland, and that leads to an increase in flight to safety and security.
“Travel bans and other disclosure requirements — things that cause short-term pain and disruptions — are viewed as just that,” Krasnow said. “Things eventually normalize. But the underlying big picture is that the more instability people feel in their homeland, the more attractive the U.S. becomes as a place to live. For a lot of Venezuelans, that means Miami.”