International investors are flooding into U.S. luxury real estate markets as geopolitical instability and stock market concerns drive capital flight from overseas, according to Rod Watson, founder of Distinct Concierge Real Estate. His recent experience with Indonesian buyers reflects a broader trend that could reshape luxury property demand.
Foreign buyers have recently funneled nearly $56 million into California real estate, a figure Watson points to as evidence of accelerating capital flight from overseas. He argues this surge reflects a growing urgency among ultra–high-net-worth individuals to move money out of their home countries, where keeping large sums in local banks is increasingly seen as risky.
Watson argues that foreign investors are increasingly viewing U.S. real estate as a safer alternative to their domestic banking systems and volatile equity markets. This shift appears particularly pronounced among ultra-high-net-worth individuals seeking to diversify away from their home country financial systems.
“They don’t have the security and safety like we have in our American system and banking system,” Watson explains. “Even with where the market is, there’s a lot of concern that we could see a stock market crash, and you know how that can impact future investments for the ultra-net-worth.”
According to Watson, this concern extends beyond banking stability to broader economic uncertainty. He observes that sophisticated international investors are actively reducing equity exposure in favor of tangible assets in stable markets.
“You’re seeing certain investors selling off stocks,” Watson notes. “People are starting to see when money starts to get cheap again and the bond rate starts to drop. People are looking at real estate as an attractive place, and specifically real estate where those values will actually hold—in Beverly Hills, Malibu, places in South Florida like Miami.”
Watson says foreign capital isn’t flowing randomly into U.S. real estate but concentrating in specific markets known for value retention and political stability. Beverly Hills, Malibu, and Miami appear to be primary targets for international investment.
The geographic selectivity suggests these investors are making strategic rather than opportunistic decisions, according to Watson. They’re seeking markets with established luxury infrastructure, stable governance, and historical price resilience.
Watson’s recent $18.8 million deal with Indonesian buyers illustrates this pattern. The clients had been evaluating the Los Angeles market for over two years, suggesting a deliberate investment strategy rather than impulsive purchasing.
“We have some overseas clients that are looking to invest in LA, and we’ve been talking to them about the market and educating them for well over a couple of years,” Watson says.
Watson suggests that foreign capital influx is coinciding with favorable market conditions for buyers, creating unique opportunities for international investors. The combination of motivated sellers and available capital appears to be driving significant transactions.
“I think the foreign investors are seeing luxury real estate as an attractive place to invest money,” Watson observes. “And I think the other buyers that are actually in tune with the market, that are savvy, are seeing opportunities to purchase property.”
According to Watson, current market dynamics favor cash buyers—a category that includes many international investors. Properties that might have attracted multiple offers in previous years are now available to buyers willing to move quickly with strong financial backing.
The timing also benefits from reduced competition, Watson suggests. Domestic buyers may be hesitant due to economic uncertainty, while international buyers view the same conditions as creating value opportunities.
Watson’s observations point to a potential structural shift in luxury real estate demand patterns. If foreign capital continues flowing into U.S. markets at current levels, it could provide price support even as domestic demand fluctuates.
The trend may also reflect changing global wealth distribution and investment preferences among ultra-high-net-worth individuals. Rather than keeping assets concentrated in home markets, these investors appear to be pursuing geographic diversification strategies.
“Now rates are starting to drop. Right now, money’s starting to become a little bit cheaper, and real estate is becoming attractive again,” Watson says. “I think for not just foreign investors, but just high net worth professionals in general.”
Watson’s success with international buyers appears to stem from providing market education rather than simple transaction services. His two-year relationship with the Indonesian clients demonstrates the extended timeline often required for foreign investment decisions.
This approach may become increasingly important as international investors seek local expertise to navigate U.S. market complexities. Agents who can provide sophisticated market analysis and cultural bridge-building may capture disproportionate shares of foreign investment activity.
Whether the $56 million figure Watson cites represents the beginning of a larger trend or a temporary spike may depend on continued global economic uncertainty and relative stability of U.S. markets compared to international alternatives.
