Foreign buyers find real estate in the Sunshine State a solid investment.
When it comes to real estate, foreign buyers are seeing the value in purchasing property in the United States.
And Florida is by far the most popular place for foreigners to invest.
Since 2007, the National Association of REALTORS® (NAR) has conducted a yearly survey to measure the level of sales of U.S. residential real estate to international clients. The survey provides information about the origin, destination, and buying preferences of international clients as well as the challenges and opportunities faced by REALTORS® in the international market. The 2014 Profile of International Home Buying Activity presents the analysis of data gathered from REALTORS® on purchases of U.S. residential real estate by international clients made during the 12 months ending March 2014. There were 3,547 respondents to the survey, conducted from April 14 – May 14, 2014.
The term international client refers to two types of purchasers of properties.
- Type A, Non-Resident Foreigners: Foreign clients with permanent residences outside the U.S. These clients typically purchase property for investments, vacations, or visits of less than six months to the U.S.
- Type B, Resident Foreigners: Clients who are recent immigrants (in the country less than two years) or temporary visa holders residing for more than six months in the U.S. for professional, educational, or other reasons.
For the period April 2013 through March 2014, the total sales volume to international clients (“international sales”) has been estimated at approximately $92.2 billion, a 35 percent increase from the previous period’s level of $68.2 billion.
The dollar level of international sales was roughly 7 percent of the total U.S. Existing Homes Sales (EHS) market of $ 1.2 trillion for the same period.
Compared to the previous year, sales to foreigners increased both in numbers of transactions and in average price. Of total international transactions, approximately $45.5 billion were attributed to Type A non-resident foreigners; and approximately $46.7 billion were to Type B resident foreigners.
Florida again topped the nation as the state of choice among international real estate buyers, capturing 23 percent of sales transactions in the latest yearly report from the National Association of Realtors.
China led the way, accounting for $22 billion in purchases of U.S. real estate for the 12-month period, or 24 percent of total foreign sales, NAR said. A year earlier, Chinese purchases of U.S. real estate amounted to $12.8 billion, or 19 percent of total foreign sales.
“Foreign buyers are being enticed to U.S. real estate because of what they recognize as attractive prices, economic stability, and an incredible opportunity for investment in their future,” NAR president Steve Brown. co-owner of a Dayton, Ohio, brokerage, said in a statement.
Among the Chinese, the favorite state remains California, which accounted for 35 percent of sales, followed by Washington (9 percent); New York (7 percent); Pennsylvania (6 percent); and Texas (6 percent.)
In Florida, buyers from Asia accounted for just 8 percent of sales, while Latin Americans accounted for 26 percent of foreign purchases, and Europeans totaled 28 percent.
However, Realtors say that Chinese buyers are showing increased interest in Florida and that they expect sales to increase in coming years as buyers flee an overheated Chinese market. Chinese investors are also being lured by EB-5 opportunities, in which they invest in projects in order to obtain citizenship. A majority of EB-5 projects have a real estate component, although mostly commercial such as hotels, restaurants and mixed use projects.
Chinese are also starting to show interest in high end condo’s and waterfront real estate, experts say.
