Existing home sales: Foreigners are buying. What's their impact?
Although existing home sales dipped last month, foreign buyers are snapping up US homes. In some markets, they may be putting an end to the downturn in existing home sales.
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Foreign sales in Florida may be doing more than buoying the market. "Iit may be enough to turn it around, depending on the selling pressures," writes Susan Wachter, professor of real estate and finance at the University of Pennsylvania's Wharton School in Philadelphia, in an e-mail. "It is not just that a quarter [of buyers] are foreigners, it is that foreigners are likely to be the marginal buyers – those that are offering top dollar. Their wealth has not been hit by the crisis, unlike the balance sheet of the US buyer."Skip to next paragraph
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Two other states hit hardest by the housing bust are among the four most popular states for international buyers, according to the NAR: California (12 percent of international sales in the US) and Arizona (6 percent).
The US is also the most popular locale for international buyers of commercial real estate. Perennially the No. 1 destination of investment money, the US received fewer first-place votes in 2011 than in 2010, as other locales, such as Brazil, grew in popularity, according to a survey released in January by the Association of Foreign Investors in Real Estate, based in Washington. Still, 60 percent of the commercial investors in the survey said they planned to increase their property purchases in the US this year.
In Texas, commercial and residential real estate investors are increasing their activity. Texas accounted for 9 percent of foreigners' residential sales in the US, according to the NAR.
"We are seeing a larger component of international buyers coming into the Houston metro area," says Mr. Gottfried, the local broker and owner of Gottfried International Estates.
With its diversified economy of oil, electronics, and health-care, Houston has long attracted buyers from Mexico and other Latin American destinations. Their purchases have increased in the past two to three years, Gottfried says, and half or more of them purchase properties to live in while they work in the Houston area.
"We have very good pricing for our properties," Gottfried says. "We are seeing our numbers moving up."