International Buyers of US Real Estate On The Rise

Prior to the ongoing real estate crisis, the U.S. stock market was the primary investment vehicle for foreign investors. But thanks to record foreclosures, international buyers are increasingly attracted to American real estate. Several factors such as the economic recession, weakness of the dollar and the bountiful availability of real estate in choice markets are contributing to this phenomenon. Most foreign buyers believe purchasing a home in the U.S. is more affordable than in their home countries.

A survey conducted by NAR estimates that between April 1 2009 and March 31, 2010, $66 billion worth of residential properties, which is about seven percent of the residential market, were bought by foreign buyers, including those with residency outside the U.S. and workers with temporary visas.

Buyers from Canada, Mexico, the U.K. and China were the top 4 of the 55 countries. In 2010, foreign buyers purchased properties in 39 states. However, slightly over fifty three percent of the buyers are concentrated in Florida, California, Arizona and Texas. Florida and California have been the top two destinations since the past three years.

International buyers seem to have specific geographic preferences.  Florida typically attracts Canadian, European and South American buyers while the Europeans prefer the East Coast. The West Coast has been the favorite location for Asian buyers for many years and the Mexicans are drawn to the Southwest.

$247,100 was the median price paid by foreign buyers. For most buyers, the U.S. purchase was either an investment property or a second home. Sixty six percent purchased single family detached homes. International buyers purchased more condos than Americans and Florida was their top preference. Sixteen percent of the total international buyers purchased homes valued over S500,000. Interestingly, fifty five percent of international buyers bought properties by paying cash.

With the U.S. housing market continuing to be in a depressed state, 2011 will likely see more foreign buyers than 2010, especially from countries where the currency is stronger than the dollar. This could be the silver lining for America’s real estate industry in an otherwise gloomy outlook.

Florida’s existing home, condo sales up in January

ORLANDO, Fla. – Feb. 23, 2011 – Florida’s existing home and existing condo sales rose in January, according to the latest housing data released by Florida Realtors®. Existing home sales increased 14 percent last month with a total of 12,151 homes sold statewide compared to 10,702 homes sold in January 2010, according to Florida Realtors. January’s statewide sales of existing condos rose 36 percent compared to the previous year’s sales figure.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales in January; 16 MSAs had higher condo sales.

“Now is a great time for anyone thinking of buying a home in Florida to make that decision,” said 2011 Florida Realtors® President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “Mortgage rates are historically low, although they are beginning to tick up slightly as the economy shows signs of strengthening. Conditions remain very favorable for buyers, with a range of housing inventory and attractive prices.

“Homebuyers soon will have the opportunity to visit a number of open houses in their preferred locales all in a single weekend, as part of the second annual Florida Open House Weekend, March 26-27, 2011! From the Keys to the Panhandle, Realtors across Florida are participating in this statewide open house event sponsored by Florida Realtors. Consult a local Realtor® about Florida Open House Weekend, and find out more about qualification criteria and opportunities in your local housing market.”

Florida’s median sales price for existing homes last month was $122,200; a year ago, it was $131,000 for a 7 percent decrease. Analysts with the National Association of Realtors (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in December 2010 was $169,300, down 0.2 percent from a year ago, according to NAR. In California, the statewide median resales price was $301,850 in December 2010; in Massachusetts, it was $285,950; in Maryland, it was $240,000; and in New York, it was $225,000.

According to NAR’s latest outlook, improving economic conditions and strong affordability are positive factors for the coming months. “Modest gains in the labor market and the improving economy are creating a more favorable backdrop for buyers, allowing them to take advantage of excellent housing affordability conditions,” said NAR Chief Economist Lawrence Yun. “Mortgage rates should rise only modestly in the months ahead, so we’ll continue to see a favorable environment for buyers with good credit.”

In Florida’s year-to-year comparison for condos, 6,681 units sold statewide last month compared to 4,916 units in January 2010 for an increase of 36 percent. The statewide existing condo median sales price last month was $79,400; in January 2010 it was $97,000 for an 18 percent decrease. The national median existing condo price was $165,000 in December 2010, according to NAR.

The interest rate for a 30-year fixed-rate mortgage averaged 4.76 percent in January, down from the 5.03 percent average during the same month a year earlier, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

© 2011 Florida Realtors®