The National Association of REALTORS®’ 2013 Profile of International Home Buying Activity, which asks REALTORS® to report their annual international business activity within the U.S. ending each March, showed that total international sales were $68.2 billion, down approximately $14 billion from the previous year. The decline is attributed to a number of temporary factors, including economic slowdowns in a number of major foreign economies, tighter credit standards in the U.S., and unfavorable exchange rates.
“Foreign buyers are experiencing hurdles not only abroad, but also here in the U.S. when it comes to purchasing property,” said NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif. “Tight credit standards have made financing challenging for immigrants, and low housing inventories have made finding a house difficult. However, none of these factors appear to be permanent.”
Despite the temporary slowdown, foreign buyers continue to have a substantial interest in U.S. properties. Over a five-year time frame, more than 70 percent of REALTORS® reported a constant or increasing level in the number of international clients contacting them.
Twenty-seven percent of REALTORS® reported having worked with international clients this year. According to those surveyed, the most important factors influencing international clients’ purchases were that the U.S. is viewed as a desirable location and that real estate is regarded as a profitable investment.
REALTORS® reported purchases from 68 countries, but five have historically accounted for the bulk of purchases. These five countries accounted for approximately 53 percent of transactions, with Canada and China as the fastest-growing sources:
- Canada (23 percent)
- China (12 percent)
- Mexico (8 percent)
- India (5 percent)
- The United Kingdom (5 percent)
Five states made up 61 percent of reported purchases:
- Florida (23 percent)
- California (17 percent)
- Arizona (9 percent)
- Texas (9 percent)
- New York (3 percent)
About half of foreign buyers preferred to purchase in a suburban area, while a quarter preferred a more central city/urban area.