Foreign Investment in U.S. Real Estate (2010) & The Stats (Realtors Report)

Foreign Investment in U.S. Real Estate (2010) & The Stats (Realtors Report)

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The latest profile of international activity in the US housing market published by the National Association of Realtors has revealed many interesting figures, some surprising and some not so surprising.

The biggest finding for us was in the state by state breakdown of foreign purchases. According to the report, Florida (22%), California (12%), Arizona (11%) and Texas (7%) dominated in terms of the percentages of sales to foreigners this year.

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It turns out that Florida has been dominant in foreign sales for at least the last 4 years, and that Arizona has always held second place during the same period. The strange thing is that the steps down in sales volume have been almost identical in Florida and Arizona in 2008, 2009 and this year. It is also worth mentioning that Texas saw more foreign buyers in 2008 and 2009, while Arizona has taken 3rd place this year, as it was in 2007.

The report also gives us a clear look at what nationalities are most prevalent in the US housing market:

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While it is hardly surprising that Canadian’s are dominant in the market with 28% (both because it is expected and because it is known from other reports), but Mexico has taken second place, knocking Brits into 3rd. the UK into third we now have Mexico in second place with 10% of sales, and the UK in 3rd with 9%.

This is because of a fall in the share of British buyers; Mexicans represented the same percentage (10%) of sales in 2009, while British buyers were responsible for 11% of sales.

Apart from that buyers from: China/Hong Kong (8%), Germany/France (7%), India (5%), Russia (3%) and Argentina/Brazil, were the most active in 2010.

Another interesting finding was the breakdown of percentages of foreign purchases by purchase price. During recent years we have heard a lot about prime property markets performing better than lower bands, but the NAR report has confirmed that this is not the case in the US.

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According to the data: 46% of foreigner-involved sales in the US this year have been on properties costing less than $200k, 18% on properties $200-$500k, 6% on properties $500-$1million and $1million+.

This is a similar situation to last year, except properties under $200k held 37% of the market and $200k-$500k 26%. In fact it is strange that 2008, when the US market was already falling, is the only year in the last 4 years where properties of $200k-$500k held a larger share than those below $200k, at 26% and 25% respectively.

All in all the report contained few surprises, right down to the fact that most properties purchased by foreigners were cash-sales. None the less it is still good to get a look at how the market today compares with the last few years, and if anything the lack of differences between the market during the boom and during the bust is the biggest surprise. Anyone wanting to download the report can do so here.

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Photo credits: Mr Thomas via Flickr