U.S. Home Sales by Foreign Buyers Surge

The U.S. continues to remain a top destination for
foreign buyers as international purchases surged by $16 billion this year, one
of the highest increases in recent years. This is according to the National
Association of REALTORS
®2011 Profile of International Home Buying
. According to the survey,
total residential international sales in the U.S. for the past year ending March
2011 equaled $82 billion, up from $66 billion in 2010. Total international sales
were split evenly between non-resident foreigners and recent immigrants, while
combined total domestic and international existing-home sales in the U.S.
reached $1.07 trillion.

“The U.S. has
always been a desirable place to own property and a profitable investment,” said
NAR President Ron Phipps. “In recent years we have seen more and more foreign
buyers coming here to take advantage of low prices and plentiful inventory. In
addition to the advantageous market conditions, REALTORS
® in this country have a global
perspective and experience in working with clients from different cultures and
real estate practices, helping them bring value to their international clients.”

Historically, foreign buyers have been
attracted to property ownership in the U.S. for a number of reasons. U.S. homes
are generally less expensive than comparable foreign properties, homes in this
country are viewed as a secure investment, and the U.S. market offers rental
opportunities and long-term appreciation potential.

More recently, REALTORS® have noticed new factors
motivating foreign buyers. Many U.S. colleges and universities have a
significant number of international students, and some foreign families are
purchasing U.S. properties in college areas so their child has a place to live.
Another source of international demand is foreign executives temporarily working
in the U.S., some of whom prefer to purchase a residence instead of

“Besides the strength of the
dollar and the general economic trends in the U.S., international buyers are
also recognizing the benefits of home ownership in this country, especially in
the case of recent immigrants,” said Phipps. “Many foreigners perceive owning a
home here as an important accomplishment in their efforts to become established
in this country.”

Recent international
buyers came from 70 different countries, up from 53 countries in 2010. For the
fourth consecutive year, Canada was the top country of origin, with 23 percent
of sales to foreigners. China was the second most popular country of origin,
with nine percent of international sales this year. Tied for third were Mexico,
the U.K., and India. Argentina and Brazil combined reported an increase in
foreign sales with five percent, up from two percent in 2010. The top five
countries of origin accounted for 53 percent of international transactions in

The average price paid by an
international buyer was $315,000 compared to the overall U.S. average of
$218,000. However, 45 percent of international purchases were under $200,000.
This price segment has grown significantly over the years, most likely due to
overall price declines in the U.S. as well as the strengthening of some foreign

Almost every state had at
least one international transaction in the past year. The four states with the
heaviest concentration of international buyer activity have remained the same
over the past five years. Florida had 31 percent of total international
transactions this year, the most of any state. California had 12 percent, Texas
had nine percent, and Arizona rounded out the top four with six percent of
international transactions.

buyers are primarily interested in three factors when deciding where to buy in
the U.S.: proximity to their home country; convenience of air transportation;
and climate and location. Generally, the East Coast attracts European buyers.
The West Coast remains popular for Asian purchasers. Mexican buyers are
traditionally attracted to the Southwestern markets. Florida is most popular
among South Americans, Europeans, and Canadians.

Similar to last year, 28 percent of REALTORS® in 2011 reported working with
an international client. Fifty-five percent served at least one foreign client,
while the bulk of international transactions were handled by a small percentage
®. Only eight percent of members obtained 50 percent or more of their
transactions from international clients.

Sixty-one percent of foreign buyers purchased a single-family home
while 36 percent bought a condo/apartment or townhouse. In addition, 62 percent
of international purchases were reported as being all cash. This percentage is
significantly higher than all-cash purchases for domestic buyers, mostly due to
the differences in international credit reporting standards. Financing
challenges continue to be a major hurdle for international buyers, with 32
percent reporting these as their reason for not buying a home. Many
® reported that their foreign clients faced mortgage financing issues,
as well as problems with legal, tax and immigration laws.