Overseas buyers scooped up $92.2 billion of U.S. real-estate last year, driven mainly by wealthy Chinese looking for a safe haven for their families and fortunes.
According to a new report from the National Association of Realtors, sales activity from international buyers surged 35 percent in the 12 months ended in March. While international buyers represent only 7 percent of total existing home sales nationally over the period, their buying is highly focused on high-end homes in Florida, California, Texas and Arizona.
“Foreign purchasers are interested in U.S. real estate for a variety of reasons: as a place to live for those relocating in the U.S., for a job or for children going to college, for investment and portfolio diversification, and for vacation purposes,” according to the NAR report.
Buyers from five countries accounted for over half of international transactions, the report said. Chinese buyers were far and away the largest foreign buyers measured by dollar volume. Sales to Chinese buyers jumped 72 percent over the 12 month period to $22 billion. Chinese buyers now account for 24 percent of all sales made to overseas buyers, measured by dollar volume. Canada ranked a distant second as a source of foreign buyers with $13.8 billion in deals, followed by the United Kingdom and India, each with $5.8 billion.
A handful of states accounted for the bulk of the purchases. Florida attracted 23 percent of international deals, followed by California with 14 percent, Texas with 12 percent and Arizona with 6 percent.
Overseas buyers tend to pay all cash and prefer higher-end homes. Fully 60 percent of all purchases by foreign buyers were by cash, up from a third in 2007.
The mean price for sales to international buyers was $396,180 for the 12 month period, compared with $247,417 for all U.S. existing home sales. Over a third of homes sold to international buyers were for more than $500,000.
Chinese buyers were the biggest spenders. The mean price paid by Chinese buyers hit $590,826 for the period. The report said over half of reported purchases by Chinese buyers were in California (35 percent), Washington state (9 percent), and New York (7 percent). About half of Chinese buyers said they planned to use their U.S homes for “vacation home/rental purposes” and 39 percent said they planned to use it as a primary residence.
Among Canadians—who were the largest buyers by number of deals—the top locations were in the warmer sun-belt states—Florida, Arizona and California.
The report was based on a survey of 3,547 Realtors conducted between April 14 to May 14.