International home sales in the U.S. declined in the past year, but are still at their second highest level in recent years. These home sales account for over six percent of total existing-home sales in value, according to the National Association of REALTORS®.
While sales were down approximately $14 billion from the previous year, findings from the NAR's 2013 Profile of International Home Buying Activity indicates interest in U.S. properties continues to grow. This indicates the U.S. is still regarded by foreign buyers as a great place to own property.
The survey, which asked REALTORS® to report their international business activity within the U.S. for the 12 months ending March 2013, showed that total international sales were $68.2 billion, down from about $82.5 billion from the previous year. The decline is attributed to economic slowdowns in a number of major foreign economies, tighter U.S. credit standards and unfavorable exchange rates.
Over a five-year time frame, more than 70 percent of Realtors reported a constant or increasing level in the number of international clients contacting them. Twenty-seven percent of Realtors reported having worked with international clients this year.
"We live in a global real estate market. More Realtors are earning NAR's Certified International Property Specialist (CIPS) designation because they realize the specialized training the CIPS courses offer can prepare them to serve the international market," said David Wyant, the national Realtor group's 2012 International Instructor of the Year.
Wyatt returned to the Silicon Valley Association of Realtors last week to teach the week-long CIPS Institute. Twenty-one Realtors from the local area and as far as Texas, Georgia and Nigeria attended the CIPS training. The CIPS courses provide training in international business issues, currency conversion, cultural awareness, and legal and tax requirements. Upon completing the education and other requirements, Realtors will receive their CIPS designation and be recognized at the NAR Conference and Expo, which will be held in November in San Francisco. This year's CIPS Institute sponsors included Janet Case of Proxio, Richard Miller of ParSquare.com, Kenneth Chan of HSBC, and Evelyn Figueira and Kathy Liu of Citibank.
Five countries have historically accounted for 53 percent of transactions - Canada (23 percent), China (12 percent), Mexico (8 percent), India (5 percent) and the United Kingdom (5 percent).
The most important factors influencing international clients' purchases reported by Realtors were that the U.S. is viewed as a desirable location and that the real estate market is regarded as a profitable investment. Five states made up 61 percent of reported purchases the past year: Florida (23 percent), California (17 percent), Arizona (9 percent), Texas (9 percent) and New York (3 percent).
Trulia's International House Hunter Report also indicates foreign homebuyers remain big players in many U.S. housing markets, even as asking home prices rose 9.5 percent year-over-year in May. Based on all home searches on the real estate website between April 1, 2012, and March 31, 2013, Florida remains the most popular real estate market though now less attractive as home prices recover. Foreign share of search traffic was 13 percent in Los Angeles and 9 percent in San Francisco.
It's not surprising that Florida and California remain popular places to buy property, said Wyant.
"Foreign buyers like the weather in these states. They are close to their home country and it's likely they have relatives already living here. The job opportunities in Silicon Valley are fantastic and education institutions are excellent," said Wyant.
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 email or call the SILVAR office at (408) 200-0100.