With
Inventory levels tight and rising prices, the last thing our red hot real
estate market needs is more demand. Yet, that is exactly what we have and
it is providing even more support for our housing market.
The appetite for U.S. real estate continues to flourish, but international
buyers are shifting their sights from luxury to less-pricey properties. This
may be due to overall higher home prices, along with a stronger U.S. dollar,
which both cost foreign buyers more at the negotiating table.
Foreign buyers purchased $102.6 billion of residential property in the U.S. between
April 2015 and March 2016, according to NAR's annual report on international
activity in U.S. real estate.
The number of properties purchased rose 2.8 percent to 214,885. The value of
homes bought by foreigners was typically higher than the median price of all
U.S. homes.
Lawrence Yun, chief economist of the National Association of Realtors (NAR)
said that foreign purchasers' overall sales dollar volume was the second
highest since 2009.
Chinese purchasers continued to outpace all others, with their dollar volume
exceeding the total of the next four ranked countries combined. Their dollar
volume of sales, at $27.3 billion, was a slight decrease from last year's
survey but was still three times as much as Canadian buyers, who were ranked
second. Chinese buyers also bought the most expensive homes at a median price
of $542,084.
London had been a favorite of foreign investors, but the impact of the Brexit
vote is already hitting the housing market there. Buyers from the United
Kingdom were the fourth-largest consumer of U.S. real estate in the data that
was gathered before the Brexit vote.
As for U.S. destinations, five states accounted for half of foreign buyer
purchases: Florida, (22 percent), California (15 percent), Texas (10 percent),
Arizona and New York (each at 4 percent). Latin Americans, Europeans and
Canadians, who historically favor warmer climates, were most prevalent in
Florida and Arizona. Asian buyers flocked to California and New York. Texas was
more a mix of buyers from Latin American, the Caribbean and Asia. Texas may be
more of an investment play, as demand for single-family rentals there remains
strong.
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