According to the National Association of RealtorsÂ® 2010 Profile of International Home Buying Activity, ââ¦international homebuyers are increasingly attracted to property in the U.S.â
The NAR survey explains that ââ¦several factors, including the strength of the dollar, the value and desirability of U.S. real estate, and the emerging economic recovery, continue to drive international interest in owning a home in this country.â
âWhile all real estate in the U.S. is local, the same is not true for property owners,â said NAR President Vicki Cox Golder. âThe U.S. continues to be a top destination for international buyers from all over the world. Foreign buyers understand the value of owning a home in this country and can rely on Realtors to help guide them through the complex process of buying property in the U.S. With expertise, knowledge and experience, Realtors have a global perspective.â
The NAR survey covers the period between April 1, 2009, and March 31, 2010. During that time foreign buyers, including those with residency outside the U.S. as well as recent immigrants and temporary visa holders, are estimated to have purchased $66 billion of U.S. residential property, or 7 percent of the residential market.
Slightly more than a quarter of Realtors, 28 percent, reported working with at least one international client in the past year, the NAR explains. This is a significant increase from the 2009 report, when 23 percent of Realtors worked with foreign clients. Eighteen percent of all Realtors were estimated to have completed at least one sale, compared to 12 percent last year.
âSeveral factors have contributed to an increase in international buyer interest in the U.S.,â said Golder. âA large majority of Realtors report the changes in value to the U.S. dollar have had a strong impact on the international real estate business. In addition, perceptions abroad about trends in the U.S. real estate market have led many international clients to believe purchasing a home in the U.S. is more affordable than in their country and holds more value.â
International buyers came from 53 different countries around the world. The top four countries were Canada, Mexico, the U.K. and China/Hong Kong. With 23 percent of international buyers coming from Canada, the country has remained the largest buying group in the past three years. Foreign buyers from Mexico have been steadily increasing. In 2010, Mexico replaced the U.K. as the second largest buying group with 10 percent of buyers. Buyers from the U.K. decreased from 10.5 percent in 2009 to nine percent in 2010. Eight percent of recent buyers came from China/Hong Kong.
Two factors important to international clients when purchasing property in the U.S. are proximity to their home country and the convenience of air transportation. Florida typically attracts European, Canadian and South American buyers while the East Coast draws Europeans. The West Coast brings Asian buyers and the Southwest attracts Mexicans.
International buyers were reported in 39 states in 2010, but a slight majority of the total buyers are concentrated in Florida, California, Arizona and Texas. These four states account for 53 percent of purchases and have remained the top destinations for the past three years, with Florida and California remaining the top two destinations.
On average, foreign buyers tend to purchase closer to the upper end of the market; 16 percent of the total international purchases were for homes priced at more than $500,000. According to Realtors, this was because international buyers are typically looking for a second home.
The NAR survey also shows that a majority of international buyers, 66 percent, purchased single-family detached homes. However, more international buyers purchased a condo than did their U.S. counterparts, at 23 percent and 7 percent, respectively. Only 44 percent of international buyers used a mortgage to pay for their home, compared to 92 percent of domestic buyers. Fifty-five percent of foreign buyers paid all cash. Realtors reported that a majority of international buyers use all cash because of the difficulty in establishing international credit in the U.S.
[Information and quotations contained in this blog entry were taken from an article recently published by the National Association of Realtors. Â© 2010 Florida Realtors]