International clients flock to purchase U.S. homesMortgagePress.comInternational buyers of U.S. homes
Nearly one in five Realtors has sold a home to an international
client in the past year, according to new research by the National
Association of Realtors (NAR).
The 2007 NAR Profile of International Home Buying Activity is
the most comprehensive research that NAR has ever conducted to
explore the characteristics of second-home purchases in the United
States made by international clients. An international client is a
foreign citizen living abroad who has legally entered the United
States to purchase a home.
"In this country, we have always known that housing is a good
long-term investment, and many foreign buyers seem to share this
view," said NAR President Pat V. Combs, of Grand Rapids, Mich., and
vice president of Coldwell Banker AJS Schmidt. "This latest study
shows that more and more consumers from around the world are
interested in purchasing a home in the United States for
themselves, as an investment or simply to enjoy a piece of the
American dream."
In 2006, most international homebuyers purchased single-family
homes or townhomes, and like most domestic homebuyers, they
financed their purchase. However, they showed stronger preferences
for condos/apartments when compared to U.S. homebuyers. Twenty-two
percent of international buyers purchased condos/apartments, versus
12 percent of U.S. buyers. Twenty-eight percent of foreign buyers
bought their houses with cash, compared to eight percent of U.S.
buyers. The median sales price of homes purchased by international
buyers was $299,500, which is significantly higher than the U.S.
median of $221,900 during the same period.
Forty-seven percent of all international buyers purchased homes
exclusively for vacation, while 22 percent were motivated primarily
by investment. Nearly a third of foreign buyers cited both vacation
and investment as reasons for their purchase. International
homeowners spent an average of 4.2 months of the year in their U.S.
property in 2006.
A third of all international buyers are from Europe, but buyers
from Asia and North America (outside the United States) each
represent about one-fourth of the total market. Sixteen percent of
all international buyers are from Latin America. By individual
country, most buyers come from Mexico (13 percent), the United
Kingdom (12 percent) and Canada (11 percent).
Foreign buyers purchase homes across the United States, but 52
percent of sales in 2006 were concentrated in three
states—Florida (26 percent), California (16 percent) and
Texas (10 percent). The South attracted nearly half—49
percent—of international buyers last year, while 31 percent
purchased homes in the West.
Nearly a third of the Realtors surveyed worked with
international clients or prospects during the previous year.
Realtors who actually closed sales of homes to international
clients reported an average of 1.9 clients, representing 15 percent
of their annual business. Most Realtors reported a rise in sales to
international buyers—25 percent of Realtors had increasing
business compared to five years ago, with another 67 percent
reporting about the same level of international business; only
eight percent noted a decrease. A third of Realtors surveyed
believe that foreign retirees will represent an increasingly
important market for Realtors based in the United States.
"Just as many U.S. residents are looking overseas for retirement
and second homes, people in other countries are considering a home
in this country," said Combs. "As international boundaries of
homeownership dissolve, Realtors must stand ready to serve an
increasingly diverse and multicultural marketplace."
For more information, visit www.realtor.org.
