There is certainly one demographic group that is growing increasingly bullish about the U.S. housing market — and they don’t even live here. Yep, it’s foreign investors and their appetite for buying American homes is on the rise. The biggest players? How about our neighbors to the north and south?
The data rolls in from the National Association of Realtors, which reports that homebuyers outside of the U.S. snapped up $66 billion worth of U.S. real estate from March 2009 through March 2010 (commercial property excluded). That’s 7.27% of the overall U.S. residential property market.
What’s more, 28% of U.S. realtors report working with at least one foreign real estate buyer during the past year — up from 23% in 2009. 18% of those realtors report completing a deal with an overseas buyer — that’s up from 12% in 2009, the NAR reports.
Cash is king, too, outside the U.S. While 92% of U.S. homebuyers relied on mortgage loans to finance their home purchases, 55% of international buyers paid cash.
NAR President Vicki Cox Golder cites a few key factors as to why foreign buyers are so active in the U.S. residential real estate market. Apparently, foreign investors still view the U.S. as a highly desirable real estate market, and now one that comes with lower prices, lower mortgage rates and a stronger U.S. dollar attached to it. Furthermore, the NAR data indicates that overseas investors believe that an economic recovery is underway, and that their investments in U.S. homes and properties should pay off down the road.
“While all real estate in the U.S. is local, the same is not true for property owners,” said Golder, owner of Vicki L. Cox Real Estate in Tucson, Ariz. “The U.S. continues to be a top destination for international buyers from all over the world. Foreign buyers understand the value of owning a home in this country.”
“A large majority of realtors report the changes in value to the U.S. dollar have had a strong impact on the international real estate,” she adds. “In addition, perceptions abroad about trends in the U.S. real estate market have led many international clients to believe purchasing a home in the U.S. is more affordable than in their country and holds more value.”