Foreigners Make Up 7 Percent of Total US Home Sales, NAR Survey
As the U.S. property market recovery broadens, people from all over the globe are investing in the lucrative industry. According to a survey conducted by the National Association of Realtors, foreigners made up about 7 percent of the total home sales for the year ended March 31, 2014.
The report analyzed home sales and property records across the country and from April 2013 to March 2014 and found that international home buyers spent about $92.2 billion on U.S. real estate in the period. That is a straight 35 percent increase from the figures recorded a year before and is also the highest in the past four years.
Both, resident and non-resident foreigners, were analyzed in the survey.
"They [foreign buyers] see the U.S. as a place of economic stability, they see value in our market and view it as a positive place to invest their dollars. In many places, it's a hedge against their currency," Danny Hertzberg, sales associate with The Jills Coldwell Banker told MarketWatch.
"Buying real estate overseas has been in the past limited to a relatively small group of wealthy individuals and sometimes government officials. But it's become a much bigger trend, involving affluent middle-class people," Thilo Hanemann, an analyst for Rhodium Group told Bloomberg.
So which country invested the most in the U.S. property market?
Canada, China and Mexico topped the list of foreign investors in the U.S. America's neighboring nation accounted for 19 percent of the total purchases, while China invested about $22 billion in the property market of the country. Mexico's share of the total foreign investment market was about 9 percent, just 10 and 7 percent behind Canada and china, respectively.
When analyzed according to region, Asia accounted for the largest share of investments, closely followed by Latin America and North America respectively.
While the investors hailed from various regions of the world, where did they invest all that moolah?
Florida was supposedly the favorite of the foreigners. About 23 percent of all the investment was put into the sunshine state. California and Texas followed with 14 percent and 12 percent investment share respectively.
North Americans reportedly invested more in Florida, while the Asians pooled all their money into California. The Latin Americans flocked to Texas.
What kind of properties are these foreigners interested in?
Detached single-family homes are what the international investors have been buying up. The trend of buying large homes in a foreign country has been an allure for long now and this year, 65 percent of the foreign buyers bought single-family homes.
Condos were the next preferred residences accounting for 18 percent of the total home sales. But this year, international investors started putting their money on barren lots as well, a trend that was absent in the last four years.
The intended use of these properties was also analyzed. The study found that the international buyers spent on the homes to use it as their primary residence. About 42 percent would use their assets as a primary residence while 19 percent said they bought it as an investment. Also, 17 percent said they bought the homes to use it as a vacation or family home.
You can read the full survey at Realtor.org.