International buyers continue to flock to the United States to buy homes and make real estate investments, according to the National Association of Realtors' 2014 Profile of International Home Buying Activity Report. Favorable exchange rates, affordable home prices, and increasing affluence abroad continue to push international buyers to the United States to buy homes and make real estate investments. buying property in qatar for expats
Total foreign revenues for the period April 2013 to March 2014 were projected at a record-breaking $92.2 billion, up from $68.2 billion in the previous period.
"We live in an international marketplace," said NAR President Steve Brown, "and while all real estate is local, that does not mean that all property buyers are." "Foreign investors are drawn to American real estate by what they see as attractive values, economic stability, and a fantastic opportunity to invest in their future."
International buyers and new immigrants bought homes around the country, but Florida, California, Arizona, and Texas accounted for 55 percent of all registered purchases. Florida continues to be the preferred destination, accounting for 23% of all international transactions. California is in second place with 14 percent, Texas is in third with 12 percent, and Arizona is in sixth place with 6 percent. Los Angeles, Miami, Las Vegas, Orlando, and New York City were the top five cities searched online by foreign buyers in 2014, according to Realtor.com.
When deciding where to buy in another country, foreign buyers weigh a variety of factors, including proximity to their home country, the presence of relatives and friends, work and educational opportunities, as well as environment and location. Warmer climate regions, such as Florida and Arizona, tend to attract European buyers, while the West Coast tends to attract Asian buyers. Indian buyers prefer states like California, New York, and North Carolina, which are home to major information technology firms. It is not uncommon to see clusters of people clustered by ethnicity within markets within a single state, likely suggesting that word-of-mouth and mutual experiences affect purchases.
This year, 28% of Realtors said they had worked with foreign clients. International sales are typically done by professionals, with just 4% of those who said they had an international client seeing 11 or more international transactions a year. International transactions accounted for 1 to 10% of total transactions for about 54% of those who said they had an international customer, a drop from 2013 but still in line with previous years' levels.
When compared to domestic buyers, international buyers are more likely to make all-cash transactions. Just one-third of domestic sales were made in cash in 2014, compared to nearly 60% of registered foreign transactions. Due to a lack of a U.S.-based credit background, a lack of a Social Security number, difficulties in recording mortgage requirements, and financial profiles that vary from those typically issued by financial institutions from domestic residents, mortgage financing is a major issue for foreign clients.
Around 42% of homes purchased by international buyers are used as a primary residence. Since non-resident foreigners are only allowed to remain in the United States for six months at a time, these buyers mostly use the property for holiday, rental, or investment purposes. A single-family home accounted for about 65 percent of all sales. Nearly half of foreign clients preferred suburban land, about a quarter preferred a central city or metropolitan area, and about a third preferred a resort area.
Foreign buyers come from all over the world, but Canada, China (including Hong Kong and Taiwan), Mexico, India, and the United Kingdom accounted for nearly half of all registered international transactions. While Canada's share of purchases decreased from 23% in 2013 to 19% in 2014, China continued to lead in dollar value, spending an estimated $22 billion with an average selling price of $590,826. China was also the fastest-growing source of transactions, accounting for 16% of all sales this year, up 4% from the previous year. Mexico came in third with 9% of sales, followed by India and the United Kingdom, both with 5%.