However, according to a survey by the American Association of Real Estate Agents, foreign real estate investment is now slowly returning.
According to the report, the increase in the dollar’s appreciation was mainly due to higher purchase prices. The median homes purchased by foreign buyers between April 2021 and March this year were a record $ 366,100, even higher than the median home prices in the US market at $ 355,700.
However, the number of homes purchased by foreign buyers (98,600 existing homes) during the 12 months to March fell 7.9% year-on-year, and NAR began tracking these transactions in 2009. It was the worst since.
“Travel restrictions were a major factor,” said Lawrence Yun, chief economist at the National Association of Real Estate Agents. “Buyers want to see the property. Even travel restrictions and Covid test requirements that were lifted only this summer are inconvenient or signal” away “. “
Pandemics have made it possible for more people to buy or “invisible” remote homes by virtually looking at their homes, but most buyers still want to see real estate directly. Foreign buyers, especially those looking for a villa, were often unable to visit their homes due to travel restrictions.
According to NAR, foreign buyers are both foreigners with permanent residency abroad, as well as non-US citizens, both recent immigrants for less than two years or resident nonimmigrant visa holders. is. In the United States, more than 6 months for professional, educational, or other reasons.
Florida is by far the top place for foreign buyers, where almost a quarter of overseas purchases are made. This is followed by California, Texas, Arizona, New York, and North Carolina.
In areas that are popular with foreign buyers, competition for purchases can intensify. But, as Yun pointed out, even in popular areas, foreign buyers make up only 3% of purchases. Overall, according to the report, 1.6% of existing home sales nationwide are for foreign buyers.
“For residents of these areas, foreigners may feel like they are competing with the locals for a home. Of course, sellers get the highest possible price, regardless of who the buyer is. I’m trying to put it in, “he said. “But it can be frustrating for overpriced buyers.”
A much larger share of foreign buyers pay in cash, with 44% paying in full cash over the past year, compared to 24% of all existing home buyers in the United States. Foreign buyers are also more likely to buy the property as a second home, with 44% using it as a villa, rent, or both, compared to 17% of all existing home buyers.
Most of the homes bought by foreigners were bought by people in nearby Canada and Mexico. Buyers from Canada accounted for 11% of home purchases by foreign buyers, up from 8% in the previous quarter. Mexican buyers bought 7% to 8% last year. This was followed by buyers from China, India, Brazil, Colombia, Germany, the United Kingdom, France and Japan.
The share of overseas buyers is expected to increase in the face of supply shortages due to rising home prices and rising mortgage rates.
“The strong dollar can discourage some foreigners from buying here in the United States,” Yun said. “But the dollar fluctuations don’t hinder trading, as many buy with all cash. They will start stepping up next year.”
Despite the very high real estate prices, US real estate remains a relative deal for many international buyers.
Typical property prices are $ 28,570 per square meter in Hong Kong, $ 26,262 in London and $ 10,947 in Toronto. In San Francisco, on the other hand, it costs $ 8,250 per square meter and in Miami it costs only $ 3,170.
“It may be good that they weren’t there when US real estate was very hot,” Yun said. “No one missed the overseas market, but given the current market changes, more inventories and housing remain in the market, so it picks up as more international travel becomes possible. May start. “