International activity in U.S. residential real estate market declines, according to Realtor survey
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Rising home prices and low
inventory led to a decline
in foreign home purchases
in the United States. Total
international sales totaled $121 billion
during April 2017 to March 2018, a
21 percent decline from the previous
12-month period, according to an
annual survey from the National Association
of Realtors.
NAR’s 2018 Profile of International
Transactions in U.S. Residential
Real Estate*, found that foreign buyers
and recent immigrants accounted for
8 percent of the $1.6 trillion existing
home sales, a decrease from 10 percent
during the 12-month period that
ended March 2017.
“After a surge in 2017, we saw
a decrease in foreign activity in the
housing market in the latest year,
bringing us closer to the levels seen
in 2016,” said Lawrence Yun, NAR
chief economist. “Inventory shortages
continue to drive up prices and
sustained job creation and historically
low interest rates mean that foreign
buyers are now competing with domestic
residents for the same, limited
supply of homes.”
China continues to lead in
purchases
Five countries accounted for nearly
half (49 percent) of the dollar volume
of purchases by foreign buyers: China,
Canada, India, Mexico and the United
Kingdom. For the sixth consecutive
year, China exceeded all other countries
in dollar volume of purchases,
buying an estimated $30.4 billion worth
of residential property, a decrease of
4 percent from last year. Buyers from
Canada came in second, with $10.5 billion
worth of property, showing a more
significant decline of 45 percent from
the 2017 survey reference period, followed
by the U.K., $7.3 billion, India,
$7.2 billion and Mexico, $4.2 billion.
“The saying goes that all real
estate is local, but that does not mean
that all buyers are,” said NAR President
Elizabeth Mendenhall, a sixthgeneration
Realtor from Columbia,
Missouri and CEO of RE/MAX Boone
Realty. “Even in this current global
environment of political uncertainty,
the U.S. real estate market continues
to be seen as a safe, secure and profitable
place to invest in property.”
The survey once again showed
that foreign buying activity is mostly
limited to three states, as Florida (19
percent), California (14 percent) and
Texas (9 percent) remained the top
three destinations for foreign buyers
to purchase, followed by Arizona and
New York (both 5 percent).
The number of units purchased
by international buyers saw a slight
decrease, from 284,000 in the previous
12-month period to 266,800.
China, once again, purchased the
greatest number of units at 40,400.
Canada comes next with 27,400 units,
followed by Mexico (20,200), India
(13,100) and the U.K. (9,000).
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