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Foreign buyers come a-calling – NOT

The number of international homebuyers declined sharply throughout the United States in the past year amidst the global COVID-19 pandemic, according to the National Association of Realtors’ 2021 Profile of International Transactions in U.S. Real Estate.

International buyers purchased 107,000 residential properties from April 2020 through March 2021, marking a 31% decline from the 154,000 residences bought the previous year. The dollar value of homes purchased by international buyers declined to $54.4 billion, dropping 27% from $74 billion the previous year. In all, international buyers accounted for 2.8% of the $5.8 trillion spent on homes during the pandemic.

The median price of homes purchased by international buyers was $351,800, or 15% more than the $305,000 median price of all existing homes sold in the U.S. during the same time frame.

Both the number of homes sold to international buyers and their value hit their lowest point since 2011, when international buyers picked up 210,800 homes valued at a total of $66.4 billion.

“The big decline in foreign purchases of homes in the U.S. in the past year is no surprise, given the pandemic-induced lockdowns and international travel restrictions,” NAR Chief Economist Lawrence Yun said. “Yet, even with the absence of foreign buyers, the U.S. housing market strengthened solidly.”

The NAR categorizes international buyers in two ways: those who live abroad and those who reside in the United States and are either recent immigrants or hold a visa. The value of homes bought by international buyers already living in the U.S. totaled $32.4 billion. The total value of homes bought by those living abroad was $22 billion.

Buyers from China spent the most at $4.5 billion, followed by Canada at $4.2 billion, India at $3.1 billion, Mexico at $2.9 billion and the United Kingdom at $2.7 billion. The United Kingdom was the only nation among the top five to increase spending, jumping from $1.4 billion the previous year to take Colombia’s place on the list. The annual dollar volume spent fell by more than 50% for Mexico, Canada and China.

“As travel restrictions loosen and foreign students return to U.S. colleges in the upcoming year, there is likely to be some growth in foreign buying of U.S. real estate,” Yun said. “High home prices and the ongoing lack of inventory could, however, pose a challenge for buyers.”

Among all international buyers, 43% purchased a home as their primary residence and 42% bought with the intention of using their property as a vacation home, a rental property or both. Forty-eight percent bought homes in the suburbs, while 28% purchased homes in urban areas, following trends that have been in place for six years. However, the number of international buyers purchasing homes in resort areas fell from 17% to 7%. Detached, single-family homes accounted for 55% of international purchases, followed by townhomes (19%) and condominiums (16%).

International homebuyers declined

The number of international homebuyers declined sharply throughout the United States in the past year amidst the global COVID-19 pandemic, according to the National Association of Realtors’ 2021 Profile of International Transactions in U.S. Real Estate.

International buyers purchased 107,000 residential properties from April 2020 through March 2021, marking a 31% decline from the 154,000 residences bought the previous year. The dollar value of homes purchased by international buyers declined to $54.4 billion, dropping 27% from $74 billion the previous year. In all, international buyers accounted for 2.8% of the $5.8 trillion spent on homes during the pandemic.

The median price of homes purchased by international buyers was $351,800, or 15% more than the $305,000 median price of all existing homes sold in the U.S. during the same time frame.

Both the number of homes sold to international buyers and their value hit their lowest point since 2011, when international buyers picked up 210,800 homes valued at a total of $66.4 billion.

“The big decline in foreign purchases of homes in the U.S. in the past year is no surprise, given the pandemic-induced lockdowns and international travel restrictions,” NAR Chief Economist Lawrence Yun said. “Yet, even with the absence of foreign buyers, the U.S. housing market strengthened solidly.”

The NAR categorizes international buyers in two ways: those who live abroad and those who reside in the United States and are either recent immigrants or hold a visa. The value of homes bought by international buyers already living in the U.S. totaled $32.4 billion. The total value of homes bought by those living abroad was $22 billion.

Buyers from China spent the most at $4.5 billion, followed by Canada at $4.2 billion, India at $3.1 billion, Mexico at $2.9 billion and the United Kingdom at $2.7 billion. The United Kingdom was the only nation among the top five to increase spending, jumping from $1.4 billion the previous year to take Colombia’s place on the list. The annual dollar volume spent fell by more than 50% for Mexico, Canada and China.

“As travel restrictions loosen and foreign students return to U.S. colleges in the upcoming year, there is likely to be some growth in foreign buying of U.S. real estate,” Yun said. “High home prices and the ongoing lack of inventory could, however, pose a challenge for buyers.”

Top Real Estate Destinations

Florida was the top destination for 21% of international buyers, followed by California (16%), Texas (9%), Arizona (5%) and New York and New Jersey tied at 4%.

Among all international buyers, 43% purchased a home as their primary residence and 42% bought with the intention of using their property as a vacation home, a rental property or both. Forty-eight percent bought homes in the suburbs, while 28% purchased homes in urban areas, following trends that have been in place for six years. However, the number of international buyers purchasing homes in resort areas fell from 17% to 7%. Detached, single-family homes accounted for 55% of international purchases, followed by townhomes (19%) and condominiums (16%).

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Real Estate purchases from foreign buyers declined 5% year over year through the first financial quarter of 2020, according to a report from the National Association of Realtors.

Foreign buyers purchased 154,000 residential properties worth $74 billion. The total number of properties bought was down 16% from the previous year.

Foreign buyers living in the U.S. bought $41 billion worth of property, down 8% from the previous year, while those living abroad bought $33 billion, down 1% year over year.

NAR Chief Economist Lawrence Yun said in a press release

“Foreign buyers and recent immigrants have become less of a force in the U.S. housing market over the last couple of years,. “A lack of housing inventory — the primary factor hindering domestic buyers — is also holding back some foreign buyers. Additionally, less cross-border travel, falling international trade and fewer foreign students attending American universities are impacting foreign homebuyers.”

Boston Real Estate and China

China and Canada topped the list of foreign buyers at $11.5 billion and $9.5 billion, respectively. The remaining top 5 include Mexico at $5.8 billion, India at $5.4 billion and Colombia at $1.3 billion. Colombia replaced the United Kingdom in fifth place.
The median price for international buyers was $314,600, well above the median U.S. home sale price of 274,600.

Chinese buyers spent the most, with a median home sale price of $449,500 and about half of the properties being purchased in California and New York.

About 29% of foreign investors purchased a home in an urban area and 48% bought suburban homes.

Florida was the top state for foreign buyers for the 12th year in a row, accounting for 22% of all international purchases. Florida is followed by California at 15%, Texas at 9%, New York at 5%, and New Jersey at 4%.

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For more information please contact one of our on-call agents at 617-595-3712.

Updated: 2021

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