Investment, Lifestyle, Property

Cheaper U.S Homes Snapped Up by Foreign Buyers

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Cheaper U.S Homes Snapped Up by Foreign Buyers

The popularity of owning a home in the U.S strongly continues. The main significance is overseas buyers are now more focused on cheaper, more affordable housing turning attention away from luxury properties. There are many factors prompting cheaper purchases but the two glaringly obvious factors is an increase in house prices and a stronger U.S dollar. There has also been an increase in the number of non-resident investors.

Lawrence Yun the chief economist of the National Association of Realtors (NAR) mentioned weaker economic growth throughout the world, devalued foreign currencies and an incredible amount of financial market turbulence have left foreign buyers in a difficult position. Yun adds “While these obstacles led to a cool down in sales from nonresident foreign buyers, the purchases by recent immigrant foreigners rose, resulting in the overall sales dollar volume still being the second highest since 2009."

Between April 2015 and March 2016 NAR reports foreign buyers purchased a staggering $102.6 billion of residential property, a decline of 1.3 percent from the previous year. For those curious on what $102.6 billion can buy you, that’s 214,885 residential purchases in the U.S. Another interesting fact from the report is the houses purchased by foreign buyers was generally higher than the median value of all U.S homes.

As expected Chinese consumers was far in front of the pack with $27.3 billion worth of sales, that’s three times more spent than second placed Canada. Chinese buyers also bought the most expensive properties with a median price of $542,084.

The extremely volatile global market has made real estate purchases a solid investment with little risk. Another significant factor is the price of properties in Asia, they are very expensive in comparison to prices in the U.S.

London was always a top choice for foreign investors but the impact of leaving the E.U has already started to feel the effects in the housing market. Buyers from the U.K ranked fourth in U.S Real Estate purchases. Although, it is too early to predict the severity of the U.K leaving the E.U but sales for U.S real estate from the Brits are expected to slightly decline until the financial uncertainty is over.

The top 5 states where property was purchased by overseas buyers was; Florida with 22 percent of sales, California with 15 percent of sales, Texas with 10 percent of sales, Arizona and New York both got 4 percent of sales. Warmer states like Florida and Arizona was popular with buyers from Canada, Europe and Latin America. Asian buyers generally purchased property in California and New York. Texan sales was popular with buyers from Latin America, Asia and the Caribbean. Sales in Texas can be seen as in investment purchase because the demand for single-family homes to rent is still strong. 

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