International real estate buyers are increasingly attracted to property in the United States, according to a report by the National Association of Realtors® titled “2010 Profile of International Home Buying Activity.” Several factors, including the strength of the dollar, the value and desirability of U.S. real estate, the state of the economy and perceptions of economic trends continue to drive international interest in owning real estate in this country.
- The U.S. is a top destination for international buyers from around the world
- Foreign buyers understand the value of owning real estate in the U.S.
How Much Do They Buy?
$66 billion of U.S. residential property, or 7 percent of the entire residential real estate market.
That’s the amount purchased between April 1, 2009 and March 31, 2010 (the length of the report) by foreign buyers including those with residency outside the U.S. as well as recent immigrants and temporary visa holders.
From Which Countries?
International buyers came from 53 countries around the world. The top four countries are:
- Canada (largest buyer group in the last three years)
- Mexico (growing)
- United Kingdom (formerly ahead of Mexico)
- China/Hong Kong
Where Do International Purchasers Buy?
International real estate buyers were reported in 39 states. The market is relatively concentrated, however, with four states accounting for 53 percent of the volume:
- Florida (22.5 percent)
- California (12.5 percent)
- Arizona (9 percent)
- Texas (9 percent)
The vast majority of purchases are made in suburban areas (50 percent) and the central city/urban areas (27 percent).
Two factors seemingly important to international real estate buyers when purchasing property in the U.S. are proximity to their home country and the convenience of air transportation. For example, Florida typically attracts European, Canadian and South American buyers while the East Coast attracts Europeans. Asian buyers are primarily interested in West Coast real estate while Mexican buyers are active in the Southwest.
What Do They Buy?
A majority of international buyers (66 percent) purchased single family detached homes. Condos were also attractive to international buyers, who significantly out-bought condos percentage-wise over their U.S. counterparts, 23 percent to 7 percent.
How Do They Buy?
Foreign buyers are reported as paying cash 55 percent of the time. In contrast, 8 percent of U.S. buyers purchased their homes with only cash (no mortgage financing).
How Much Do Foreign Buyers Pay?
Generally speaking, international real estate buyers participated closer to the upper end of the market. The median price paid by international buyers was approximately $219,400 during 2009/2010, the reporting period of the profile cited at the top of the previous page. In contrast, the overall median price for existing home sales in the U.S. was $173,000 during the same period.