International Homebuyers: 6.3 Percent of Total U.S. Existing Home Sales

International buyers in the 12 months ending March 2013 made up an estimated 6.3 percent of all existing homes sales, according to a report issued by the National Association of Realtors® (NAR). This is the seventh survey completed by NAR since 2007.

NAR dichotomizes foreign buyers into two strata:

Type A – Those with permanent residences elsewhere that purchase a U.S. dwelling for vacation, investments or visits to the U.S. for less than six months annually

Type B – Immigrants in the U.S. less than two years or those holding temporary visas for more than six months in the U.S.

In the 12 month period examined, Type A foreign buyers purchased an estimated $34.76 billion of dwellings, Type B bought $33.42 billion, with the total market including domestic buyers an estimated $1,080.25 billion. The $68.2 billion, while representing 6.3 percent of the total market, was down from $82.5 billion from 2012 but up versus the $66.4 billion in 2011. The 2013 decline was attributed more to purchases of lower priced-transactions rather than reduced demand.

Primary Motives of Foreign Buyers

  • 39 Percent – U.S. Desirable Location
  • 31 Percent – U.S. Real Estate Viewed as Profitable Investment
  • 22 Percent – Secure Investment
  • Other

Reasons Foreigners Did Not Purchase

  • 36 Percent – Ongoing Costs, Taxes and Insurance
  • 29 Percent – Could Not Find a Property to Buy
  • 26 Percent – Financing Issues
  • 9 Percent — Immigration Laws

Source of Foreign Buyers (3 Percent and Up)

  • 23 Percent – Canada
  • 12 Percent – China
  • 8 Percent – Mexico
  • 5 Percent — India
  • 5 Percent – United Kingdom
  • 3 Percent – Argentina

Type of Property Purchased

  • 64 Percent – Detached Single-Family
  • 21 Percent – Condominiums – Apartments
  • 9 Percent – Townhouse – Row House
  • 6 Percent – Other

Intended Use of Property

  • 42 Percent – Primary Dwelling
  • 21 Percent – Vacation Home for Family and Friends
  • 17 Percent – Residential Rental Property for Investment
  • 4 Percent – Commercial Rental Property for Investment

Number of Months Intended Use

  • 41 Percent – More than 6 Months
  • 20 Percent – 3 to 6 Months
  • 19 Percent – Do not know
  • 11 Percent – Less Than 1 Month
  • 9 Percent – 1 to 2 Months

Median Purchase Price by Country

7-27-13 graph

Where They Bought

  • 9 Percent – Arizona
  • 17 Percent – California
  • 23 Percent – Florida
  • 9 Percent – Texas

To read all related information (and there is a bunch) and download the NAR report, click: http://www.realtor.org/topics/profile-of-international-home-buying-activity

Without question it is a global economy. Real estate included.

Ted

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