Top 5 Foreign Purchasers of U.S. Real Estate
If you ask around about the health of the U.S. real estate market, you’ll probably get some mixed responses. Much of the data is positive: new and existing home sales are both on the rise, prices have climbed rapidly over the past few months, and the number of underwater mortgages is declining. The White House and the Federal Reserve have both cited the housing market as a bright spot in the ongoing economic recovery, and homeowner’s equity is at its highest level since the first quarter of 2008.
While there are some economists who warn that the euphoria won’t last forever, the current state of the U.S. real estate market looks pretty good. So good, in fact, that international buyers are buying property at near record rates. A recent report by the National Association of Realtors shows that international clients purchased an estimated $68.2 billion worth of residential property in the 12 months ending in March 2013 — or 6.3 percent of the total value of the existing home sales market in the U.S.
Of that $68.2 billion, five countries accounted for 53 percent of total purchases.
1) United Kingdom
According to the data compiled by NAR, purchasers from the United Kingdom accounted for 5 percent of all international transactions. This is the lowest the figure has been in seven years, having fallen steadily from 12 percent in 2007 and 2008. The median purchase price was $250,000.
Overall, foreign investors view the U.S. real estate market as a solid investment.
Purchasers from India also accounted for a 5 percent share of total international transactions in the 12-month period ending in March 2013. This is down from a high of 9 percent in 2009, and at the bottom of its range over the past seven years. The median purchase price was $300,000.
Overall, rates of mortgage financing for international purchasers has declined fairly steadily over the past few years. All-cash purchases have become increasingly common.
Purchasers from Mexico accounted for an 8 percent share of total international transactions. This is up from a low of 7 percent in 2011, but down from 13 percent in 2007. The median purchase price was $156,250.
Overall, most international purchases were for suburban-area properties.
Purchasers from China accounted for 12 percent of total international transactions, the highest level in seven years. In 2007, China accounted for just 5 percent of total international transactions. The rate climbed to 8 percent in 2010 and 2011, and jumped to 11 percent in 2012. The median purchase price was $425,000.
Purchasers from our neighbor to the north accounted for 23 percent of total international transactions in the 52-week period ending in March. This is down slightly from 24 percent in 2012, and in line with the rate of six of the past seven years. Canadians accounted for just 10 percent of sales in 2007. The median purchase price of reported properties was $183,000.
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