U.S. Home Sales to Foreigners Surge 49% to New Record

U.S. home sales to foreigners surge 49% to new record

Foreigners are getting serious about “Buying American” real estate.

The National Association of Realtors released a report Tuesday that said foreign buyers and recent immigrants spent an estimated $153 billion on American properties in the year ending March 2017. That was a 49% increase over the previous year and the highest level since record-keeping began in 2009.

The purchases accounted for 10% of the total value of existing home sales in the U.S. The report did not include new homes.

The breakdown of sales between foreigners and recent immigrants was about 50:50.

Blame Canada

America’s neighbors to the north were one big factor behind the surge.

Canadian real estate investors nearly doubled their purchases of American homes over the period because of the relative affordability of properties in the States. Many Canadians have been squeezed out of property markets in cities like Toronto and Vancouver that have experienced rapid price gains.

Canadians were the second biggest foreign purchasers of homes after the Chinese. Buyers from China shelled out nearly $32 billion over the period, while Canadians spent $19 billion.

Trump turmoil?

Foreign buyers had to brush off U.S. political turmoil in order to make their purchases.

“The political and economic uncertainty both here and abroad did not deter foreigners from exponentially ramping up their purchases of U.S. property over the past year,” said Lawrence Yun, chief economist at the National Association of Realtors.

“While the strengthening of the U.S. dollar in relation to other currencies and steadfast home-price growth made buying a home more expensive in many areas, foreigners increasingly acted on their beliefs that the U.S. is a safe and secure place to live, work and invest,” he said.

Location, location, location

Nearly half of all foreign sales were in three states: Florida, California and Texas.

Canadians gravitated to Florida. Chinese buyers focused on California. And Texas was the preferred state for Mexican buyers.

New Jersey and Arizona were the fourth and fifth most popular states.

The report estimated foreign buyers typically paid just over $302,000 per property, up 9% from the previous year.

About 10% of foreign buyers paid over $1 million.

Posted on July 24, 2017 at 11:12 pm
MJ Steen | Category: Uncategorized | Tagged , , , , , , , ,

10 Markets Feeling the Housing Crunch

Here are the 10 U.S. markets in the U.S. with the lowest inventory of homes for sale, according to Realtor.com:

  1. Seattle, Washington

Percentage of housing stock for sale: 0.4 percent

Decrease in for-sale homes in 2016: 13.4 percent

Impacts: Only one in every 263 homes in Seattle is for sale. Around 65 percent of Seattle’s land is zoned only for single-family homes, limiting high-density apartment buildings and foreign investors are holding on to property with no immediate plans to inhabit it.

“Buying houses without occupying them is really bubblelike behavior,” says Peter Orser, chairman of the Runstad Center for Real Estate Studies at the University of Washington. “Right now it’s not at its peak yet, but it’s certainly a growing concern.”

  1. Eugene, Oregon

Percentage of housing stock for sale: 0.6 percent

Decrease in for-sale homes in 2016: 27.3 percent

The Ducks hometown has its strongest housing market since 2006 and low inventory has homes selling within 24 to 72 hours, says Karen Church of Re/Max, who predicts some relief from an increase of ready sellers.

  1. Grand Rapids, Michigan

Percentage of housing stock for sale: 0.7 percent

Decrease in for-sale homes in 2016: 24.7 percent

Workers are being hired by data warehouse company Switch and the city has net in-migration for the first time in a decade.

  1. Buffalo, New York

Percentage of housing stock for sale: 0.6 percent

Decrease in for-sale homes in 2016: 15.9 percent

The city’s large population of 45- to 64-year-olds, mean fewer homeowners willing to sell.

  1. Fort Wayne, Indiana

Percentage of housing stock for sale: 0.8 percent

Decrease in for-sale homes in 2016: 24.9 percent

Prices jumped 14 percent last year as the unemployment rate dropped to 3.6 percent with robust advanced manufacturing jobs in aerospace, auto and medical devices. New construction hasn’t kept pace, leading the number of homes on the market to drop 24.9 percent.

  1. Sacramento, California

Percentage of housing stock for sale: 0.6 percent

Decrease in for-sale homes in 2016: 5.5 percent

Redevelopment funding has improved the state capital, says Tom Gonsalves, owner of Gonsalves Real Estate Properties, but low construction activity is causing a housing shortage

  1. Detroit, Michigan

Percentage of housing stock for sale: 1 percent

Decrease in for-sale homes in 2016: 25.7 percent

Housing prices spiked last year and downtown neighborhoods saw the sale of $300,000 condos and a rare $1 million loft. From 2015 to 2016, for-sale homes dropped by 25.7 percent. Homeowners in neighborhoods where home values have yet to recover can’t afford to sell.

  1. Portland, Oregon

Percentage of housing stock for sale: 0.6 percent

Decrease in for-sale homes in 2016: 24.7 percent

California and other transplants moving to here means the housing crunch gets more intense. Skyrocketing rents, including for pricey microapartments, create a sense of urgency among buyers. Developers are replacing modest dwellings with bigger homes or multifamily rental units, creating even fewer homes for entry-level home buyers.

  1. Santa Rosa, California

Percentage of housing stock for sale: 0.4 percent

Decrease in for-sale homes in 2016: 1.8 percent

The city in Sonoma wine country is a modest alternative in pricey Northern California, which results in three to five offers, says Realtor Kimberly Sethavanish of Kimberly James Real Estate.

  1. Omaha, Nebraska

Percentage of housing stock for sale: 0.8 percent

Decrease in for-sale homes in 2016: 6.6 percent

With affordable homes and promising job opportunities from Omaha’s “fab five” Fortune 500 companies, including Berkshire Hathaway and ConAgra Foods, the city is overwhelmed with homebuyers eager to make a move.

“Existing homeowners in established neighborhoods are not in a hurry to move,” says Realtor Mark Leaders with CBSHome Realty. “Most new homes are in west and southwest Omaha. Even if folks want to trade up, they don’t want to leave the urban hubs. So instead they are rehabbing the homes and staying,”

— Homes & Gardens of the Northwest staff

Posted on January 23, 2017 at 11:14 pm
MJ Steen | Category: Uncategorized | Tagged , , , , , , , , ,