Thursday, July 21, 2016
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Florida tops states where foreigners purchase property
NATIONAL ASSOCIATION OF REALTORS
Waning economic growth in many countries and higher home prices further enhanced by a strengthening U.S. dollar resulted in a slight decline in international sales dollar volume of U.S. property over the past year and a significant retreat in buying from non-resident foreigners.
This is according to an annual survey of residential purchases from international buyers recently released by the National Association of Realtors. The survey also revealed that the dollar volume of sales from Chinese buyers exceeded the total dollar sales figure of the next top four ranked countries combined.
NAR’s 2016 Profile of International Activity in U.S. Residential Real Estate found that foreign buyers purchased $102.6 billion of residential property, a 1.3 percent decline from the $103.9 billion of property purchased in last year’s survey. Overall, a total of 214,885 U.S. residential properties were bought by foreign buyers (up 2.8 percent), and properties were typically valued higher ($277,380) compared to the median price of all U.S. existing home sales ($223,058).
Lawrence Yun, NAR chief economist, says this year’s findings highlight the tremendous appeal U.S. real estate still has on many foreign nationals despite the price of property becoming less affordable.
“Weaker economic growth throughout the world, devalued foreign currencies and financial market turbulence combined to present significant challenges for foreign buyers over the past year,” Mr. Yun says. “While these obstacles led to a cool down in sales from non-resident foreign buyers, the purchases by recent immigrant foreigners rose, resulting in the overall sales dollar volume still being the second highest since 2009.
“Foreigners — especially those from China — continue to see the U.S. as a solid investment opportunity and an attractive place to visit and live.”
Five states account for half of foreign buyer purchases. Slightly over half of all foreign buyers purchased property in Florida (22 percent), California (15 percent), Texas (10 percent), Arizona or New York (each at 4 percent). Latin Americans, Europeans and Canadians, who tend to buy in warm climates for vacation purposes, mostly sought properties in Florida and Arizona. California and New York drew the most Asian buyers, while Texas mostly saw sales activity from Latin American, Caribbean and Asian buyers.
The median purchase price over the survey period was a tad lower ($277,380) compared to the 2015 survey ($284,900) as a result of the fewer non-resident foreign buyers. Overall, foreign buyers most commonly purchased a home priced between $250,001 and $500,000, while 10 percent paid over $1 million or more. Exactly half of all international transactions were all-cash purchases, which was slightly down from a year ago (55 percent) but still roughly double the overall share of existing sales. All-cash purchases were more common by non-resident foreign buyers (73 percent) and those from Canada, China and the United Kingdom.
A majority of foreign buyers over the past year purchased a single-family home, and nearly half bought in a suburban area. Two–thirds or more of buyers from each China, India, Mexico and the United Kingdom purchased detached single-family homes, while Canadian buyers were the most likely to buy a multi-family home.
The 2016 Profile of Home Buying Activity in U.S. Residential Real Estate can be ordered by calling (800) 874- 6500 or by going to realtor.org online. The report is free to NAR members, $149.95 for others. ¦