This is a friendly, interactive exchange of information on all Real Estate related subjects. Follow on Twitter: @RETALKS


Moderator: admin

 
User avatar
news
Newsbot
Topic Author
Posts: 8209
Joined: Tue Sep 30, 2003 3:20 pm
Contact:

Foreign Buyers are Pumping the Brakes on Home Purchases

Thu Aug 06, 2020 4:29 pm

Aug 6 2020, 11:13AM

Foreign buyers cut back their investment in U.S. residential properties over the 12 months that ended in March. It was the second year-over-year decline.

The National Association of Realtors® (NAR) annual survey among its members about their transactions with international clients found foreign buyers purchased $74 billion in existing U.S. homes from April 2019 through March 2020, a 5 percent decline from the same period a year earlier. The number of properties purchased dropped 16 percent to 154,000.

Foreign buyers who were U.S. residents, either as recent immigrants or holding the appropriate visas, purchased $41 billion in residential real estate, down 8 percent from the prior period. Foreign buyers living abroad spent $33 billion, a 1 percent decrease. Those two types of international buyers were responsible for 4 percent of the nation's total existing home sales of $1.7 trillion during that period.

"Foreign buyers and recent immigrants have become less of a force in the U.S. housing market over the last couple of years," said NAR Chief Economist Lawrence Yun. "A lack of housing inventory - the primary factor hindering domestic buyers - is also holding back some foreign buyers. Additionally, less cross-border travel, falling international trade and fewer foreign students attending American universities are impacting foreign homebuyers."

Persons from China and Canada were the most prolific buyers of U.S. homes, spending $11.5 billion and $9.5 billion, respectively. Those countries have produced the most buyers every year since 2013 although Chinese investment was down more than $2 billion from the previous year. Mexico at $5.8 billion, India at $5.4 billion, and Colombia at $1.3 billion rounded out the top five. Colombia replaced the United Kingdom as the fifth largest country of origin by dollar volume of foreign buyers.

International buyers spent a median of $314,600 on existing homes,15 percent more than the median price of $274,600 for all such U.S. sales. NAR says the difference is due to the location and type of properties purchased. The median purchase by Chinese buyers, $449,500, reflects that more than half the properties were in either California or New York.

"In the upcoming year, better opportunities may become available for foreign buyers in large U.S. cities like New York and San Francisco," said Yun. "New patterns of domestic migration are trending away from expensive cities to more affordable suburbs and small communities because of the pandemic and greater work-from-home possibilities."

Foreign buyers preferred the suburbs to cities; 48 percent purchased in the former location versus 29 percent in an urban area, a trend has persisted for five years. Seven percent bought in a resort area, down from 15 percent in 2009, and reflecting fewer buyers from the United Kingdom and Canada who made many of those purchases.

The Sunbelt remains the preferred destination. Florida led the list for the 12th straight year with 22 percent of international purchases. California ranked second at 15 percent. Texas at 9 percent, New York at 5 percent, and New Jersey at 4 percent completed the top five U.S. destinations.

Thirty-nine percent of purchases were all-cash, with a higher percentage of those transactions, 58 percent, than resident buyers at 27 percent. The highest share of all-cash purchases, 66 percent, were made by Canadian buyers while 40 percent of Chinese buyers also paid cash. Asian Indian buyers were the least likely to pay all-cash at just 8 percent, and the most likely to obtain a mortgage at 87 percent.

Half of foreign buyers purchased the property for primary residence use. Three in four - 74 percent - purchased detached single-family homes and townhouses.

Katie Johnson, NAR's general counsel and chief member experience officer said the association collaborates with local Realtor groups to educate foreign buyers on the opportunities in U.S. real estate and maximize the global business potential in local markets. "NAR and the Realtor brand... has grown to a network of 104 real estate associations across 85 countries, ensuring stable, accessible markets that allow our members to make direct connections with global real estate professionals and sources of foreign investment."

http://www.mortgagenewsdaily.com/080620 ... _sales.asp

Who is online

Users browsing this forum: No registered users and 5 guests