The Abduction Continues
Foreign buyers remain a strong part of the U.S. real estate picture overall—increasing the number of properties purchased by 3 percent over the last year—but they are particularly important in a few select markets.
According to the National Association of REALTORS® 2016 Profile of International Activity in U.S. Residential Real Estate, Florida and Arizona attracted buyers from Latin America, Europe and Canada who tend to purchase vacation properties in warm climates. California and New York drew Asian buyers, most likely for reasons related to geographic proximity, cultural similarities and job opportunities. Texas attracted buyers from Latin America and the Caribbean, as well as Asian buyers.
Although foreigners collectively spent slightly less—$102.6 billion from April 2015–March 2016, compared to $103.9 billion during the previous 12-months—the number of transactions increased from 208,947 to 214,885. At least half of these transactions are paid in cash.
Only about 60 percent of these buyers are U.S. residents, while the other 40 percent live outside the U.S.—a significant change from past years when the split was more even. The report attributes this to a slowdown in economic growth internationally and the strengthening of the U.S. dollar, lowering their buying power. Nearly three-quarters of those living outside the U.S. are purchasing a vacation property, while only a quarter of those living in the U.S. are purchasing for the same purpose. Most of those are looking for their primary residence.
As in the past few years, China continues to dominate the market, making up 14 percent of foreign buyers, followed by Canada with 12 percent, then Mexico with 8 percent and India with 7 percent. The U.K. only makes up 4 percent of buyers, while it comprised about 7 percent five years ago. Canadian buyers also dropped significantly over the years, from 23 percent in 2011 to 12 percent in 2016. On the other hand, China has offered the largest growth in buyers, from 9 percent in 2011 to 14 percent today.
Read the rest of the report at REALTOR.org.
