Foreigners bought $82 billion worth of American property in the 12 months ending March 2011 according to the latest data from the National Association of Realtors. A 24% increase on last year.
Canadians led the way with a dominant 23% of all foreign sales going to Canadian buyers, China came in second with 9% and Mexico, India and the UK tied for third at 7%. Brazilian and Argentinian buyers — counted together — accounted for 5% of sales to foreigners, up from 2% in the previous year.
“In recent years we have seen more and more foreign buyers coming here to take advantage of low prices and plentiful inventory,” Ron Phipps, president of the Realtors association and president of Phipps Realty in Warwick, Rhode Island, said in a statement today.
According to the report foreign demand is being fuelled by the combination of falling prices and the weak dollar giving foreigners even bigger discounts. According to the S&P/Case – Shiller index of home prices in 20 US cities, prices in February 2011 were down 33% from the July 2006 peak, with unemployment and the huge volume of foreclosed properties being sold at a discount hurting values across the board. Zillow inc recorded an 8.2% fall in prices in the first quarter.
According to the report by the NAR foreigners accounted for 8% of the $1.07 trillion in US house sales in the year ending March. The report said that half the sales ($41 billion, up from $25 billion last year) went to immigrants who had moved to America in the past 2 years and those holding visas, and the other half went to international investors.
62% of foreigners paid in cash with no mortgage during the period according to the report, and the most popular states were Florida, California, Texas and Arizona, accounting for 58% of foreign purchases between them. According to the NAR on top of the discounts foreigners are buying because of rental opportunities, the potential for long term capital appreciation, and because the US is still seen as a safe place to invest.