Real Estate Matters

 Monday, August 18, 2008

International real estate purchases in the U.S. continue to be a significant share of business for many Realtors, according to the 2008 National Association of Realtors^® Profile of International Home Buying Activity.

This new research indicates that international buying activity in the U.S. is widespread. NAR estimates that between 150,000 and 190,000 homes were sold to foreign nationals from May 2007 to May 2008. Recent foreign buyers purchased properties in every state and the District of Columbia. The most popular states where international buyers purchased homes are Florida, California and Texas. Arizona, New York, Washington and Nevada were also popular.

The typical international buyer purchased a single-family vacation home costing $297,400. Four in ten paid for their U.S. property with cash, compared with 7 percent for all domestic buyers. The typical international owner stayed at his or her U.S. property for 2.6 months during the year, according to the NAR findings.

Foreign exchange rates have helped make U.S. homes more affordable for international buyers. The euro, for example, has strengthened 24 percent versus the U.S. dollar over the past two years. Home prices are also now more affordable in places such as Florida and Arizona, contributing to those states’ popularity among foreign buyers.

International buyers are distinct from domestic buyers. International buyers tend to purchase more expensive properties, which cost an average of 36 percent more than the typical domestic buyer’s home purchase. In fact, more than 14 percent of properties sold to international buyers sold in excess of $750,000. Foreign buyers also show a greater preference for condos and townhouses compared to domestic buyers.

People from North America, Europe and Asia accounted for more than 85 percent of recent foreign home buying transactions. The top six countries of origin for foreign home buyers, in rank order, were Canada, the United Kingdom, Mexico, China, India and Germany. This year, Canada replaced Mexico as the country with the largest share of foreign buyers in the U.S. The percentage of Canadian buyers doubled from last year, from 11 percent to 23.5 percent.

The 2008 NAR Profile of International Home Buying Activity is based on responses from approximately 4,000 Realtors^® who serve foreign buyers. It describes international home buying activity in the U.S. over the 12-month period from May 2007 to May 2008 and updates information from the 2007 survey.

Cheers,

Bill Geller