Less foreign buyers are purchasing US property as the trade war and immigration policies hit home and impact overseas property investors.
While foreign buyers closed on an impressive sounding $77.9 billion worth of existing homes in the country from April 2018 through May 2019, that represents a 36 per cent drop from the prior year. And it’s way down from a record high of $153 billion two years ago, according to the latest National Association of Realtors (NAR) report.
Foreign real estate investors purchased about 183,100 existing homes compared with 266,800 the year before. They paid a median $280,600 for their homes, slightly higher than the $259,600 median sale price nationally.
Florida remains the most popular state for foreign buyers, accounting for around one in five of all purchases.
California remains popular with the international set, having about 12 per cent of foreign purchases. Next up was Texas, at 10 per cent. Mexican and Indian buyers were particularly big fans of the Lone Star State. It was followed by Arizona, at 5 per cent, and New Jersey, at 4 per cent. New Jersey is especially popular with buyers from the United Kingdom.
The decrease in foreign buyers with plenty of money to spend in the priciest cities has helped to create softer luxury markets in these areas. In New York City, discounts between 10 and 15 per cent on properties $8 million and above are now common.
The Chinese continued to be the dominant foreign buyers in the market for the seventh straight year. But the estimated $13.4 billion they spent was down 56 per cent from the previous year.
The Chinese economy has been slowing, plus the Chinese government has tightened rules on how much money is leaving the country, severely curbing foreign investments.
Canadians spent the second most by investing $8 billion on existing homes, purchasing nearly the same number of homes as the Chinese. They were the most likely to submit all-cash offers.
They were followed by buyers from India, who purchased $6.9 billion of U.S. existing homes; the United Kingdom, at $3.8 billion; and Mexico, at $2.3 billion.
However, it is important to note that the report looked only at those interested in existing homes. It excluded the high-end new construction that the wealthiest individuals often gravitate toward.