Foreign Buyers Flood US Real Estate, But Buy Cheaper Homes

Interest for U.S real estate from international buyers continues to grow, however, the buyers are focusing on less-expensive properties as opposed to luxury properties.

This shift may be from a stronger U.S dollar and higher home prices, two things that cost international buyers more at the negotiating table.

According to Lawrence Yun, chief economist of the National Association of Realtors also known as NAR, foreign buyers have faced significant challenges over the past year. These challenges include weaker economic growth around the world, devalued foreign currencies and financial market instability. Due to these challenges, there was a cool down in sales from non-resident foreign buyers.

According to NAR's annual report on international activity in U.S. real estate, international buyers purchased $102.6 billion of residential property in the U.S. between April 2015 and March 2016. The number of properties bought increased 2.8 per cent to 214,855 while there was a 1.3 per cent decline in dollar volume from the previous annual report by NAR.

Rick Sharga, executive vice president of an online real estate website explains that the minor drop in dollar volume can be accounted for based on the locations of the properties purchased and the types of properties purchased.

Rick Sharga also adds that there is some evidence indicating that foreign buyers including both investors and individuals just searching for a home, are looking for properties in locations other than the expensive markets such as New York City, San Francisco, Washington D.C.

International buyers are purchasing properties in smaller, less-pricey cities in the Midwest and Southeast.

Reference:

CNBC News

http://www.cnbc.com/…/foreign-buyers-flood-us-real-estate-b…