NAR’s 2017 Profile of International Activity in U.S. Residential Real Estate, revealed that foreign investment in U.S. residential real estate skyrocketed to a new high, as transactions grew in each of the top five countries where buyers originated. Additionally, nearly half of all foreign sales were in three states: Florida, California and Texas, with Florida (22% of all foreign sales) being the top state for foreign real estate investment purchases.
According to The 2107 Profile of International Activity in U.S. Residential Real Estate, between April 2016 and March 2017, foreign buyers and recent immigrants purchased $153.0 billion of residential property, which is a 49 percent jump from 2016 ($102.6 billion) and surpasses 2015 ($103.9 billion) as the new survey high. Overall, 284,455 U.S. properties were bought by foreign buyers (up 32 percent from 2016), and purchases accounted for 10 percent of the dollar volume of existing-home sales (8 percent in 2016).
“Foreigner buyers were not deterred by the political and economic uncertainty both in the U.S. and abroad, instead they exponentially ramped up their purchases of U.S. property over the past year”, said Lawrence Yun, NAR chief economist. “While the strengthening of the U.S. dollar in relation to other currencies and steadfast home-price growth made buying a home more expensive in many areas, foreigners increasingly acted on their beliefs that the U.S. is a safe and secure place to live, work and invest.”
The upswing in foreign investment came from both recent immigrants and non-resident foreign buyers, as each increased substantially to new highs. In 2017, sales to foreigners residing in the U.S. reached $78.1 billion (up 32 percent from 2016) and non-resident foreign sales spiked to $74.9 billion (up 72 percent from 2016).
Foreign buyers typically paid $302,290, which was a 9.0 percent increase from the median sales price in the 2016 survey ($277,380) and above the sales price of all existing homes sold during the same period ($235,792). Approximately 10 percent of foreign buyers paid over $1 million, and 44 percent of transactions were all-cash purchases (50 percent in 2016).
Florida is the most popular state for foreign buyers, especially Canadian buyers. After dipping in the 2016 survey to $8.9 billion in sales ($11.2 billion in 2015), Florida experienced a massive hike in activity from Canadian buyers. Transactions from Canadians in 2017 totaled $19.0 billion – a new high for Canada. Chief economist Lawrence Yun, attributes this notable rise in activity to Canadians opting to buy property in U.S. markets that are expensive but still more affordable than in their native land. While much of the U.S. continues to see fast price growth, home price gains in many cities in Canada have been steeper, especially in Vancouver and Toronto.
Rounding out the top five countries, by dollar volume in sales in 2017 were: buyers in China, who exceeded all countries by dollar volume of sales at $31.7 billion, which was up from last year’s survey ($27.3 billion) and topped 2015 ($28.6 billion) as the new survey high. Then Canada with ($19.0 billion), the United Kingdom ($9.5 billion), Mexico ($9.3 billion) and India ($7.8 billion) all increased from their levels in 2016.
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