Foreign buyers identify US as profitable investment, report says

Foreign buyers continue to have a substantial interest in U.S. properties, according to the National Association of Realtors^® (NAR) 2013 Profile of International Home Buying Activity.

Over a five year time frame more than 70 percent of Realtors^® reported a constant or increasing level in the number of international clients contacting them. International home sales in the U.S. declined in the past year, but are at their second highest level in recent years and are over six percent of total existing-home sales in value.

The survey, which asked Realtors^® to report their international business activity within the U.S. for the 12 months ending March 2013, showed that total international sales were $68.2 billion, down approximately $14 billion from the previous year. The decline is attributed to a number of temporary factors, including economic slowdowns in a number of major foreign economies, tighter U.S. credit standards and unfavorable exchange rates.

“Foreign buyers are experiencing hurdles not only abroad, but also here in the U.S. when it comes to purchasing property,” said NAR President Gary Thomas, in a statement. “Difficult economic conditions, particularly in Europe, have impacted foreign buyers, but several factors in the U.S. have also affected their purchasing power here. Tight credit standards have made financing challenging for immigrants, and low housing inventories have made finding a house difficult. However, none of these factors appear to be permanent.”

According to the report, 27 percent of Realtors^® reported having worked with international clients this year. The most important factors influencing international clients’ purchases reported by Realtors^® were that the U.S. is viewed as a desirable location and that the real estate market is regarded as a profitable investment.

“Realtors^® provide international buyers with a significant advantage when purchasing property in the U.S. Realtors^® who have earned NAR’s Certified International Property Specialist designation have received specialized training and are well prepared to service the international market,” Thomas said.

International buyers tend to cluster in specific locations based on countries of origin, as well as several other factors. “Many factors influence foreign buyers’ decisions on where to purchase in the U.S., but the most important are proximity to home country, presence of relatives and friends, availability of job and education opportunities, and the climate,” added Thomas. “International buyers also differ on the type of desired property. Some are looking for trophy properties while others are interested in modest vacation homes.”

About half of foreign buyers preferred to purchase in a suburban area, while a quarter preferred a more central city/urban area. A majority purchased a detached single-family home and 63 percent used all-cash.