Thursday, July 14, 2016

Foreign buyers - California - US

The number of sales to foreign buyers rose once again over the past year, although international buyers are shifting their preferences from luxury homes to less-pricey properties.

NAR (National Association or Realtors) economists think the change in the price of homes international buyers are after may be due to overall higher home prices, along with a stronger U.S. dollar, which both cost foreign buyers more these days.

“Weaker economic growth throughout the world, devalued foreign currencies and financial market turbulence” all had an impact on foreign buyers over the past year, said Lawrence Yun, NAR’s chief economist.  “While these obstacles led to a cool down in sales from nonresident foreign buyers, the purchases by recent immigrant foreigners rose, resulting in the overall sales dollar volume still being the second highest since 2009.”

Foreign buyers purchased $102.6 billion of residential property in the U.S. between April 2015 and March 2016, according to NAR’s report. The number of properties purchased rose 2.8 percent to 214,885. The value of homes bought by foreigners was typically higher than the median price of all U.S. homes.

Experts say a slight drop in dollar volume is due to the types of properties purchased, and the locations of those properties. There are signs that foreign buyers have begun looking beyond higher-priced markets like San Francisco and New York to purchase properties in smaller, less-expensive cities in the Southeast and Midwest.

Chinese purchasers continued to outpace all others, with their dollar volume exceeding the total of the next four ranked countries combined. Their dollar volume of sales, at $27.3 billion, was three times as much as Canadian buyers, who were ranked second. Chinese buyers also bought the most expensive homes at a median price of $542,084.

Five states accounted for half of foreign buyer purchases, according to the NAR report: Florida, (22 percent), California (15 percent), Texas (10 percent), Arizona and New York (each at 4 percent).

 It is interesting to note that California is home to about 25% of all of the foreign-born population of the US.  Florida has only 9% of the foreign-born population of the US, as shown on the graph below:

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