U.S. homes continue to be popular to foreign investors, as shown in the increased percentage of home sales to foreign buyers in the 12-month-period ended March 2010.Over the 12-month period, sales of residential properties to investors who are citizens of countries other than the U.S. accounted for 4.6 percent of the $907 billion worth of housing units sold in the country, based on house sales figures from the National Association of Realtors. This percentage marked a jump from the 4.2-percent share in the preceding 12-month period and also meant that international investors continue to perceive value in U.S. homes despite the housing meltdown. Just like domestic investors, they also believe in realizing great profits when the housing market finally recovers.
Additionally, nonimmigrant visa holders and new immigrants also made substantial residential purchases during the 12-month period, accounting for 2.71 percent of total home sales in the country, another indication that foreign investors have great confidence in the U.S. residential market.
Based on interviews with NAR members, 28 percent of them reported they have negotiated a deal with at least one foreign residential buyer within the 12-month period, up from 23 percent in the previous 12-month period. They said that most of their international clients took advantage of favorable foreign exchange rates and the substantial price discounts offered to home buyers. About 18 percent of them completed deals with foreign clients, a significant improvement over 12 percent in the preceding 12-month period.
For the third straight year, Canadians were again the top investors in the U.S. residential market, accounting for 23 percent of all international residential real estate buyers. Mexicans were second, making up ten percent, replacing the British investors who moved down to third, with a nine-percent share. Chinese investors took the fourth place, accounting for 8 percent of all foreign buyers.
While 92 percent of all residential property buyers financed their home purchases with mortgage loans in 2009, 55 percent of international buyers paid theirs with cash. Since it was not easy for foreign investors to obtain real estate loans for international purchases, most of them paid their purchases in cash.
Last year, total sales of previously-owned single-family homes reached 4,566,000 units in seasonally adjusted yearly rate, a jump of 4.97 percent from the adjusted yearly rate of 4,350,000 units in 2008. The biggest sales volumes occurred in the South and in the West.
The median sales price for pre-owned single-family houses nationwide in 2009 was $172,100, a decrease of 12.46 percent from $196,600 in 2008 and a steep plunge of 21.02 percent from $217,900 in 2007. The median prices were even lower in the Midwest, where the median price was $142,900, and in the South, where the median price was $155,000. These low prices were among the major reasons for the surge in home sales to foreign buyers.
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