BROADCASTS.com

b'

Foreign investors are returning to the U.S. real estate market after a pandemic-related dry spell. A new survey by the National Association of Realtors shows a big increase in the dollar value of properties bought by foreign buyers in the last year. They had all but disappeared during the pandemic, but are slowly coming back \\u2013 especially now that most travel restrictions have been lifted which makes it easier to visit properties before they buy.

Hi, I\'m Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

The National Association of Realtors surveyed members about transactions they\\u2019ve done with international clients and released the results in a report called 2022 Profile of International Transactions in U.S. Residential Real Estate. (1) The transactions would have taken place between April of last year and March of this year.

NAR Report on Foreign Buyers

Foreign buyers purchased a total of $59 billion worth of existing homes during that time. That\\u2019s an 8.5% increase from the previous year, but inflation is contributing to that figure. The report also shows that the total number of properties fell 7.9% because you can\\u2019t buy as much house for your money right now.

So how many homes did that money buy? According to NAR, international buyers purchased a total of 98,600 existing homes. That\\u2019s 2.6% of the 6.12 million homes that changed hands over the last year.

NAR\\u2019s chief economist Lawrence Yun believes that high home prices have discouraged some foreign investors. He said in the press release: \\u201cAffordability challenges along with the inability to find the right property were the top reasons given for prospective international buyers who showed interest but ultimately did not purchase a home in the United States.\\u201d

He also believes that travel restrictions discouraged some potential buyers. He says: \\u201cFor a second year in a row, restrictions and general caution tied to international travel during the pandemic slowed home buying by wealthier foreign buyers.\\u201d

Two Groups of Foreign Buyers

The report separated foreign buyers into two groups including those who recently immigrated to the U.S. or live here on a visa and buyers who live in another country. The first group accounted for more transactions. It says that foreign buyers living here purchased just over $34 billion dollars worth of existing homes. That\\u2019s up 5.2% from the previous year. Foreign buyers who don\\u2019t live in the U.S. spent almost $25 billion during that same time period. That\\u2019s up 13.2% from the previous year.

Buyers from China and Canada spent the most money. Chinese buyers spent $6.1 billion while Canadian buyers spent $5.5 billion. Rounding out the top five are buyers from INdia, Mexico, and Brazil.

The most popular destination for international buyers was Florida, for a 14th year in a row. Almost 25% of the homes bought by foreign buyers were in Florida. California was second on that list followed by Texas, Arizona, New York, and North Carolina.

Foreign Buyer Forecast

Yun is expecting to see an increase in the number of international buyers over the next year, despite high home prices and supply chain issues. He says the strong dollar may also discourage a some buyers, but overall, he says: \\u201cMany are purchasing in all cash, so the swings in the dollar are not a deal breaker.\\u201d

He says that U.S. properties still appear inexpensive when you compare them to other countries. As CNN Business reports, a typical property in Hong Kong costs $28,570 a square meter. (2) One in London costs $26,262 a square meter. And in Toronto, it\\u2019s $10,947 a square meter. Head over to Miami and you only pay $3,170 a square meter. Even San Francisco is cheap, at $8,250 a square meter.

Yun told CNN: "Maybe it is a good thing they were absent when US real estate was super hot," said Yun. "No one really missed the foreign market, but given the current shift in the market, with more inventory and homes staying on the market, it might begin to pick up as more international travel is possible."

Higher inventory levels are also good for U.S. investors. It\\u2019s more difficult to find the best deals because of high home prices, but it\\u2019s not impossible. If you\\u2019d like help in figuring out how to find a good deal for your money, you can do that at RealWealth. You need to be a member, but it\\u2019s free to join at newsforinvestors.com. That will give you access to our network of resources, including our investment counselors.

And please remember to hit the subscribe button, and leave a review!

Thanks for listening. I\'m Kathy Fettke.

Links:

1 -https://www.nar.realtor/newsroom/annual-foreign-investment-in-u-s-existing-home-sales-climbed-8-5-to-59-billion-ending-three-year

2 -https://www.cnn.com/2022/07/18/homes/foreign-home-buyers-2022/index.html