I don’t know about you but I’ve been watching the Olympics as often as possible the last two weeks and I love it. There are so many reasons I look forward to the Olympics every two years. Yes, I love sports but it’s so much more than that: being exposed to things I would normally never be exposed to, the stories, the determination, the talent and how it connects us all to our country and the world. One thing that really struck me was how many athletes competing for their country (not the USA) went to our universities and/or trained here. We have been through hard times and it’s far from over, but this is still the place many want to live and invest. For that reason I’m writing this week about the boom we’ve seen in the purchase of real estate in the USA by the international market.
There are two major things attracting buyers and increasing sales considerably (besides just the pure greatness of the USA): low prices and a weak American dollar.
Due to the decreased value of the dollar, foreign buyers in certain countries (see below) have tremendous buying power vs. earlier years.
The latest National Association of Realtors Profile of International Home Buying Activity found that international residential sales rose from $66.4 billion in 2010-2011 (measured April 2010 to March 2011) to $82.5 billion for the year 2011-2012.
What market are these buyers attracted to? A survey found (not surprisingly) that Florida, California, Texas and Arizona were the favorites. Florida by far had the most activity, making up 26 percent of all foreign purchases; California was second with 11 percent.
Understandably, the survey found that European buyers were attracted to the East Coast and Asian buyers to the West Coast. Florida and Texas have a mix of demographics. Texas is popular with Mexican buyers, Florida with South American, European and Canadian buyers.
NAR President Moe Veissi, broker-owner of Veissi & Associates says that “today’s advantageous market conditions have drawn more and more foreign buyers to the USA in recent years, signaling how desirable and profitable owning property in this country can be. Foreign buyers recognize that owning a home in the USA has many benefits, both financial and social. Many purchase property as an investment, vacation home, or to diversity their portfolio.”
There is also a benefit for those who want to immigrate. It is easier for someone to immigrate to the USA if they already have property here. Immigrants view homeownership as being an important accomplishment. They see it as a way of becoming established and connected with the community.
Who are the biggest international buyers of Real Estate in the USA? Canada, followed by China. Canada accounted for 24 percent of international sales while China accounted for 11 percent (that’s up from 9 percent in 2011). Mexico was third with 8 percent and both India and the UK accounted for 6 percent.
Elton Ash, executive vice-president of Re/Max of Western Canada said that “Canadians love a good deal, and there’s no question that there are still some to be had in recreational property markets across the country.” We are seeing activity picking up and much of it is being fuelled by pent-up demand that’s been building since 2008 when many began waiting out the market turn.
50 percent of international buyers say they want to move here and make this their primary residence.
So what is the message here? The USA is still internationally looked upon as a great place to invest and a wonderful place to live. GO USA!
Look forward to seeing you in class later this week.