BOSTON ( TheStreet) -- Wealthy foreigners from around the globe are taking advantage of America's housing bust to snap up U.S. properties at cut-rate prices -- helping the market rebound in the process.
A recent National Association of Realtors study estimated that foreigners and immigrants who've lived here less than two years spent $82.5 billion on U.S. homes in the 12 months ended March 31. That's about 9% of the total paid for all U.S. housing purchases during the period.
The NAR also found that foreigners spent more on average -- $400,000 per property vs. $252,000 for the overall market -- and paid cash for homes 62% of the time instead of taking out mortgages."Foreigners have been a good source of sales, and they're providing both stability in the market and some tendency toward a more normal price appreciation," report co-author Jed Smith says. Smith and his colleagues say foreigners and recent immigrants are diving into U.S. real estate because buyers consider housing here a good investment and see America as a safe haven for assets. Many also need a place here for business trips, vacations or retirement or expect their children to study at U.S. colleges and need housing. Additionally, some foreigners buy property in conjunction with buying U.S. businesses. That's because anyone who invests $1 million in a U.S. company and creates 10 jobs can qualify for an "EB-5" visa and eventual citizenship. (The requirement drops to $500,000 if you invest in a depressed U.S. locale.) Texas Realtor Alston Boyd says lots of wealthy Mexicans are using the EB-5 program to relocate their families from crime-ridden areas south of the border. "It's mostly driven by people wanting safety for themselves and their families, particularly in areas where there's a danger of kidnapping," says Boyd, who leads the Texas Association of Realtors' international-sales committee. In fact, the NAR found that Mexicans accounted for 8% of all sales to foreigners and recent immigrants during the 12-month period studied. Other top sources for foreign buyers included Canada (24% of all sales to non-U.S. nationals), China (11%), India (6%) and Britain (6%). Buyers from different countries favor different parts of America. For instance, the NAR found that lots of Germans have bought property in southwest Florida, while many Canadians gravitate toward Arizona. Researchers attribute the variations to a given locale's closeness to a buyer's home country, coupled with word-of-mouth recommendations among buyers from the same nation. Here's a look at the four states the NAR found are most popular with foreign and recent-immigrant buyers. All percentages refer to home sales made during the 12 months ended March 31.