The number of international real estate buyers in the United States’ residential real estate market has taken a hit due to the international economic crisis. The latest survey from the US National Association of Realtors (NAR) shows that the interest in US real estate from abroad has decreased over the past year. The survey involves the time period from May, 2008 to May, 2009 and was given to US Realtors.
For Realtors who answered the survey, 23 percent indicated they had at least one international client over the year covered, which is down from 26 percent for the previous year. There were an estimated 154,000 homes sold to foreign nationals during the period surveyed, which is a drop from the previous year of approximately 170,000 international sales.
The median price for a home purchased by international property buyers for the year that ended in May, 2009 was $247,100. That is significantly higher than the US national home price average of $198,100 in 2008. Additionally, nearly half of all buyers from abroad paid cash for their property, avoiding the mortgage process. One reason for the high number of cash purchases is the increased difficulty obtaining a mortgage in the US market.
NAR chief economist Lawrence Yun noted that recent improvements in the economy and credit markets should help to increase the numbers of foreign buyers. “Stock market gains and improving bank balance sheets will permit a greater amount of lending for second home purchases,” he said. “In addition, expanding foreign economies for international buyers and favorable exchange rates give them more purchasing power, particularly in a period of record high affordability conditions in the United States. Property investment here generally builds wealth over the long term.”
The top countries for foreign buyers of US property were Canada, which has 17.6 percent of buyers; the United Kingdom, with 10.5 percent; Mexico, with 9.8 percent; India, with 8.5 percent; and China, with 5.4 percent. Mexican and Indian buyers increased as a percentage of overall international purchasers, while the other three nations saw a decline.
Florida remains the most popular state for European buyers, while California has become more popular and more affordable as well. 33.9 percent of respondents indicated that their US homes are for vacation and holidays, while 23.5 percent bought as an investment as well as holidays.
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