The combination of low housing prices and the comparative weakness of the dollar continues to push foreign buyers to the United States, raising international home sales to $82.4 billion up from $66.4 billion last year, according to the ""National Association of Realtors"":http://www.realtor.org/ (NAR) 2012 Profile of International Home Buying Activity.[IMAGE]
NAR conducted the survey and asked realtors to report their international business activities within the United States for the 12 months ending March 2012. Twenty-seven percent reported having worked with international clients this year. Fifty-two percent reported that international transactions accounted for one to 10 percent of their total transactions, while 27 percent reported that they made up more than 10 percent of total transactions. Total international sales were split evenly between non-resident foreigners and recent immigrants.
Moe Veissi, NAR president and broker-owner of Veissi and Associates, Inc., in Miami, Florida, said there are other factors also contributing to the continuing growth.
""Low housing prices, a good inventory condition and increased buying power with today's exchange rates help attract international clients,"" Veissi explained in a release. ""Foreign buyers also have the advantage of working with a realtor. Realtors who specialize in serving international clientele have a truly global perspective; they know what hurdles foreign buyers face when purchasing property in the U.S., and have the expertise and knowledge that comes from working with clients from different cultures and real estate practices.""
While international buyers purchased all throughout the country, a majority of sales were distributed across four states. Florida, California, Texas, and Arizona accounted for 51 percent of international home purchases. Florida has been the fastest growing destination of choice, accounting for 26 percent of foreign purchases. California was second with 11 percent and Texas and Arizona accounted for seven percent.
Proximity to the home country, the presence of relatives and friends, the convenience of air transportation, and climate and location are all important considerations to prospective foreign buyers.
In general, locations on the East Coast attract European buyers, while Asian buyers tend to purchase on the West Coast, particularly California. Florida attracts a diverse set of[COLUMN_BREAK]
international buyers including South Americans, Europeans and Canadians. Meanwhile, Texas remains popular among Mexican buyers, according to the survey.
""Foreign buyers recognize that owning a home in the U.S. has many benefits, both financial and social,"" said Veissi. ""Many purchase property as an investment, vacation home, or to diversify their portfolio. In addition, many recent immigrants view homeownership as an important accomplishment. They believe that being a homeowner is one of many ways they become established in the U.S. and attain stability, security, and a sense of community.""
Canada, China, Mexico, India, and the United Kingdom accounted for 55 percent of all international transactions, according to the survey. However, other international buyers came from all over the globe. Canada accounted for 24 percent of international sales while China accounted for 11 percent, up from nine percent in 2011. Mexico was third with eight percent of sales and India and the U.K. both accounted for 6 percent.
The average price paid by foreign buyers was $400,000 compared to the overall U.S. average of $212,000. Forty-five percent of international purchases were under $250,000. In addition, there appears to be a gradual increasing trend toward purchases in the $250,000 to $500,000 price range. In 2012 this range accounted for 30 percent of purchases, up from 28 percent in 2011.
Several reasons account for why the average international home price is higher than the average overall price. The international client is typically wealthier than the domestic buyer and is looking for a property in a specialized niche, for example, a larger property suitable for multi-generational living, or a property that establishes the individual's presence and standing in the community.
In Miami, even though home sales in April fell slightly, the multimillion-dollar luxury home market experienced a 36.5 percent increase from both the month before and previous year, according to San-Diego based DataQuick.
According to the survey, the foreign buyers purchase homes for primary residence as well as vacation and rental use. More than half, 66 percent, of survey respondents reported international buyers purchased detached single-family homes. About half of international buyers, 52 percent, preferred to buy in a suburban area and about a quarter, 23 percent, bought in a central city/urban area.
However, not all international buyers are able to take advantage of the current market.
In fact, NAR reported that in 26 percent of the transactions that failed, financing issues were the problem. The difficulties facing foreign buyers in trying to obtain a mortgage include lack of U.S.-based credit history and hurdles in meeting mortgage requirements. Other reasons for not purchasing properties include cost, taxes, insurance, and immigration laws.
Chicago-based, NAR represents 1 million members involved in all aspects of the residential and commercial real estate industries.