The dollar volume of home sales from Chinese buyers over the past year exceeded the total dollar sales figure of the next top four ranked countries combined, according to an annual survey of residential from international buyers released this month by the National Association of Realtors. The total international sales dollar volume over the past year, however, declined slightly due to weaker economic growth in many countries and a strengthening U.S. dollar.
The national Realtor group's 2016 Profile of International Activity in U.S. Residential Real Estate, covering U.S. residential real estate sales to international clients between April 2015 and March 2016, found that foreign buyers purchased $102.6 billion of residential property, a 1.3 percent decline from $103.9 billion of property purchased in last year's survey. Overall, a total of 214,885 U.S. residential properties were bought by foreign buyers (up 2.8 percent).
"Weaker economic growth throughout the world, devalued foreign currencies and financial market turbulence combined to present significant challenges for foreign buyers over the past year," said Lawrence Yun, the national Realtor group's chief economist.
Most foreign buyers were from China (14%), followed by Canada (12%), Mexico (8%), India (7%) and the United Kingdom (4%). For the fourth year in a row, Chinese buyers exceeded all countries by dollar volume of sales at $27.3 billion. Buyers from China purchased 29,195 housing units and typically bought the most expensive homes at a median price of $542,084.
Mark Wong, chair of the Silicon Valley Association of Realtors Global Business Council, makes at least three business trips to China each year. Wong said though higher home prices and the strong dollar might have weakened U.S. home purchases by foreign buyers, interest from China remains strong.
"The Chinese still see the U.S. as the land of opportunity, a safe place to invest their money. Even with the weakening of Chinese currency against the U.S. dollar, many Chinese still consider a home in America a good buy," said Wong.
Sales from the UK may weaken this year, according to Yun. "Sales activity from UK buyers could very well subside over the next year depending on how severe the economic fallout is from Britain's decision to leave the European Union," explained Yun. "However, with economic instability and political turmoil outside of the U.S. likely to persist, the world view of American real estate as a safe investment should keep demand firm even as pressures from a stronger dollar continue to weigh down on affordability."
Slightly over half of all foreign buyers purchased property in Florida (22 percent), California (15 percent), Texas (10 percent), Arizona or New York (each at 4 percent). Latin Americans, Europeans and Canadians mostly sought properties in Florida and Arizona. California and New York drew the most Asian buyers, while Texas mostly saw sales activity from Latin American, Caribbean and Asian buyers. Exactly half of all international transactions were all-cash purchases.
Approximately 14 percent of responding Realtors reported they had a client seeking to purchase property in another country, which is over double the amount in last year's survey (6 percent). Countries that generated the most inquiries about purchasing abroad were Mexico, Costa Rica, Philippines, Colombia and Canada.
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.
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Variations of this article have appeared in local area newspapers.
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