Foreign Investors In US Housing Market
Industry analysts have seen more and more interest in the US housing market from foreign investors than anytime in the recent past. With interest rates in the US at record low levels, and housing prices continuing to fall across the country, many overseas investors are finding that the wise old investing advise about buying real estate is best carried out in the U.S. The state that gets the most interest from foreign buyers is Florida, with its pleasant climate, vacation and tourist attractions, and relatively low cost of real estate, its not surprising that The Sunshine State tops the list, especially in the Latino community.
Recent data show that over 31% of all home purchases in Florida are made by foreign buyers. Going back just a couple of years, to 2009, foreign buyers in the U.S. housing market accounted for $66 billion of the market. By 2010 that figure had jumped to $82 billion. Adding to the allure of a new home state-side, at least for a while, was the positive benefit that most currencies had vs. the usd, making these purchases even more attractive to foreign buyers. And, while credit conditions are still very tight with most banks still holding back the reigns on their loan portfolios, in many cases foreign buyers have cash and therefore are not as concerned about finding a loan.
Mexico is the top country where foreign buyers come from to buy houses in the United sates. Coming in a close second to Florida with the most foreign investment in their housing market is California, with many of these buyers coming from Mexico, the Philippines, China, India, and Vietnam. Texas is third, and not surprisingly, many of its foreign home buyers come from Mexico also. Rounding out the top is Arizona, taking in 6% of all foreign money coming into the U.S. housing market.
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My take:
It isn’t surprising to see foreigner taking advantage of the tremendous opportunities in the U.S. housing market, especially among those more wealthy individuals who don’t necessarily want to move to the U.S. but just to buy at the bottom. Foreign investment has always taken place in the commercial real estate markets by much more well-heeled individuals so I guess more and more foreigners are following the lead.
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