US house prices are creeping up, prompting an influx of foreign property buyers eager to snap up a bargain.
Investors are targeting Florida, Arizona, Texas, and Southern California, according to the National Association of Realtors (NAR).
A lacklustre home housing market is urging Canadians to lead the way in buying US property – with around 25% of all sales going to buyers from north of the border.
House-hunters from Canada heavily favour Florida and Arizona, said NAR economist Jed Smith.
“They buy for vacation purposes and like to have a place in the sun,” he said.
The four states took a 51% share of the foreign buyer market – with Florida taking 26%, California 11% and the other two 7% each.
Canadians dominate market
While Canadians are the dominant foreign buyers of US homes, buyers from China, Mexico, India, and Britain make up 55% of international buyers.
The Chinese have an affinity for West Coast real estate, while Indians prefer the East Coast and Mexican buyers tend to cluster in Texas.
Home sales to foreign buyers added up to $82.5 billion for the year ending March 2012, up from $66.4 billion in 2011. Total international sales were evenly split between non-resident foreigners and recent immigrants, says the NAR.
“Today’s advantageous market conditions have drawn more and more foreign buyers to the U.S. in recent years, signalling how desirable and profitable owning property in this country can be,” said NAR President Moe Veissi.
“Low housing prices, a good inventory condition and increased buying power with today’s exchange rates help attract international clients. Foreign buyers also have the advantage of working with a realtor.
Looking for a place to call home
“Realtors who specialise in serving international clientele have a truly global perspective; they know what hurdles foreign buyers face when purchasing property in the US, and have the expertise and knowledge that comes from working with clients from different cultures and real estate practices.”
Around 45% of international home purchases were for less than $250,000.
The trend is toward purchases in the $250,000 to $500,000 price range. In 2012 this range accounted for 30% of purchases, up from 28% in 2011. The average price paid by an international buyer was $400,000 compared to the overall US average of $212,000.
“Foreign buyers recognise that owning a home in the US has many benefits, both financial and social,” said Veissi.
“Many purchase property as an investment, vacation home, or to diversify their portfolio. In addition, many recent immigrants view homeownership as an important accomplishment. They believe that being a homeowner is one of many ways they become established in the US and attain stability, security, and a sense of community.”