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REALTOR®: California Continues to Attract International Buyers

Wednesday, September 9, 2009

Although interest in U.S. real estate by international buyers declined somewhat due to the worldwide recession and severe credit crunch, the 2009 National Association of REALTORS® Profile of International Home Buying Activity reports the state of California saw a notable rise in foreign interest as affordability conditions improved markedly in the state last year.

"California has a very diverse population, and as such, has always been a choice for international homebuyers," said Julia Truesdale Keady, president of the Silicon Valley Association of REALTORS® and a REALTOR® with Alain Pinel Realtors in Palo Alto.

Keady reported REALTOR® members of the local trade association are often engaged with international buyers. "Silicon Valley is a prime location, especially for international business. Our schools also attract international families to the area. The great neighborhoods and easy access to San Francisco, San Jose and other cities are the reasons why many families choose to live in our region," Keady said.

During this period an estimated 154,000 homes were sold to foreign nationals, which is down from approximately 170,000 international transactions during the previous 12 months. Foreign buyers were active in every state and the District of Columbia, with the most popular states being Florida, which accounted for 23.0 percent of all foreign purchases; California, 13 percent; Texas, 10.7 percent; and Arizona, 7.1 percent. These states are major gateways into the U.S. from other countries and also offer relatively mild climate.

"Florida is the most popular state for European and Latin American buyers, while Asian buyers are drawn to California," said National Association of REALTORS® chief economist Lawrence Yun.

The top five countries of origin for foreign buyers were Canada, with 17.6 percent of buyers; the United Kingdom, 10.5 percent; Mexico, 9.8 percent; India, 8.5 percent; and China, 5.4 percent. The percentage of buyers from Canada, the U.K. and China declined from the previous study, while purchasers from Mexico and India increased. Although most buyers were from North America, Europe and Asia, buyers from Latin America, Africa and Oceania also purchased U.S. real estate.

The median price for a home paid by foreign buyers for the year ending in May 2009 was $247,100, higher than the overall national price of $198,100 in 2008. A significant number, 45.8 percent of foreign buyers, paid cash for their property, in part because obtaining a mortgage was more difficult than in prior years.

Yun said recent improvements in the credit market will help reverse the slide in foreign buyers. "Stock market gains and improving bank balance sheets will permit a greater amount of lending for second home purchases," he said. "In addition, expanding foreign economies for international buyers and favorable exchange rates give them more purchasing power, particularly in a period of record high affordability conditions in the United States. Property investment here generally builds wealth over the long term."

The prime purpose for purchasing a property in the U.S. is to use it for a vacation home, cited by 33.9 percent of respondents; for both investment and vacations, 23.5 percent; as a residential rental property for investment, 18.3 percent; and commercial property for investment, 3.5 percent.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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