The U.S. economy faced some setbacks this year that made a significant impact on how Americans chose to make foreign investments.
A global survey of agents at luxury brokerage The Agency found 38.46 percent of agents thought the fluctuating value of the U.S. dollar had impacted their market, compared to 61.54 percent who said it had no impact on their market, according to the firm’s annual Red Paper report published on Wednesday.
During the first six months of 2025, the U.S. dollar fell 10.7 percent, and as of Sept. 1, the dollar had fallen 9.7 percent from the beginning of the year.
That 10.7 percent drop in value was the biggest loss the dollar has experienced in more than 50 years, which caused some luxury buyers to reassess where to invest internationally.
“Agents say that Americans haven’t retreated from international property purchases entirely, though,” The Agency’s Red Paper says. “Many have found ways to get around the volatility — through peso purchases in Mexico, leveraging negotiating power in Portugal’s calmer market, or embracing crypto payment methods in Panama, for example.”
Since the lure of international real estate continues to draw luxury American buyers, they have had to shift where and how they invest, The Agency’s report said. Here’s how they have done so.
Pulling back in select markets
With the dollar weakened, many American buyers have pulled away from countries that use the euro for currency, including Portugal and Spain, the report said. Americans are taking longer to make decisions on properties, and making more meaningful purchases for second- or retirement homes.
Because of this American buyer trepidation, there is actually less competition now for American buyers in Portugal, The Agency Portugal Managing Partner Ayres Neto said in the report. That may actually afford Americans who are still transacting greater negotiating power, Neto added.
Meanwhile, in Mallorca, the gap left by Americans has opened doors for Europeans in the market, The Agency Mallorca Managing Partner Alby Euesden said.
Favoring the peso
Agents working in Baja California have also noticed a change in response to currency shifts, with more U.S. residents buying homes in Baja while commuting to work in the U.S., The Agency San Diego’s Jeff Davidson said in the Red Paper. “But as the dollar-to-peso exchange rate slid from 20.8 pesos in January to 18.7 pesos in September — a 10 percent decrease — [Davidson has] noticed an increase in buyers purchasing in pesos,” the Red Paper stated.
Property taxes are also significantly cheaper in Baja compared to California, giving American buyers further incentive to look south of the border for opportunities.
More to explore in Central America
A weaker dollar has provided more opportunities for other foreign buyers in Panama, according to local market experts, even while U.S. buyers continue to transact there.
“While a weaker dollar in early 2025 certainly enhanced purchasing power for buyers using stronger currencies like euros, Canadian dollars or various Latin American currencies, Panama’s pricing has largely remained stable,” Victoria Levitam, managing partner of The Agency Panama, said in the Red Paper.
Crypto investors have also entered the Panama market with growing frequency, the report said, and are wielding their investments to purchase property.
Meanwhile, the luxury market in Nicaragua is just now starting to recover in the wake of tariff announcements by the Trump administration this year, The Agency Nicaragua Managing Partner Joao Mucciolo said in the Red Paper.
“Foreign and local buyers all froze because of what Trump was doing with tariffs,” Mucciolo said. “Now, as the stock market has normalized, we’re seeing more people feel confident and taking chances.”
