U.S. residential purchases from foreign buyers reached a new high in the last year. Nearly half of all foreign sales were in Florida, California and Texas, according to the latest Realtor international buyer report.
The National Association of Realtors "2017 Profile of International Activity in U.S. Residential Real Estate" found between April 2016 and March 2017, foreign buyers and recent immigrants purchased $153 billion of residential property, which is a 49 percent increase from $102.6 billion in 2016.
A total of 284,455 U.S. properties were purchased by foreign buyers, a 32 percent increase from 2016. Foreign buyer sales accounted for 10 percent of the dollar volume of existing-home sales, compared with 8 percent in 2016.
China maintained its top position in sales dollar volume for the fourth straight year, exceeding all countries by dollar volume of sales at $31.7 billion, compared with $27.3 billion in 2016. Chinese buyers also purchased the most housing units for the third consecutive year - 40,572 units compared with 29,195 in 2016.
Sales volume from the four other top countries where buyers of U.S. property originate also rose from last year's levels. Transactions from Canadians this year totaled $19 billion, up from $8.9 billion in the 2016; United Kingdom, $9.5 billion; Mexico, $9.3 billion; and India, $7.8 billion.
Foreign buyers typically paid $302,290, a 9 percent increase from the median sales price in the 2016 survey. Approximately10 percent of foreign buyers paid over $1 million, and 44 percent of transactions were all-cash purchases.
Florida (22 percent), California (12 percent) and Texas (12 percent) remain the top destinations for foreigners. Florida was the most popular state for Canadian buyers. Chinese buyers mostly chose California. Texas was the preferred state for Mexican buyers.
According to Denise Welsh, president of the Silicon Valley Association of Realtors, in the past four years, Silicon Valley's housing market has seen tough competition for homes from Chinese buyers. Many of the buyers from China have paid all cash for their purchases.
"Buyers from China have purchased homes so their children can study here. Other buyers have purchased property for investment and have just left the home vacant," said Welsh.
Welsh said since the Chinese government tightened money outflow last year, Realtors have seen a pullback from buyers of residential real estate. Instead, more activity has shifted towards commercial real estate because Chinese companies were still able to get around the government controls and invest overseas. News that the Chinese government has placed further restrictions on capital outflow may slow market activity in that sector, as well, but Welsh does not expect demand from Chinese buyers and investors to die down completely.
"The San Francisco Bay Area has always attracted foreign buyers and investors, especially those from China, because of its accessibility to the Chinese mainland, our excellent weather, education institutions and economic growth," said Welsh. "They still see the U.S. as a safe place to live, work and invest."
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.
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