Foreign buyers aren’t into US real estate these days. National Association of Realtors (NAR) numbers show a lot less foreign buyers in the year ending March. This is the second year volumes have declined, printing the fewest foreign buyers in at least a decade.
US Real Estate Is Less Attractive To Foreign Buyers In 2019
There’s a lot less foreign buyers of American real estate these days. Foreign buyers bought 183,100 homes this year, down 31.37% compared to the same period a year ago. Foreign buying of US real estate peaked in 2017, and the annual number of sales has fallen 35.64% from that peak. This is the fewest number of foreign buyers in the US in at least 10 years of data provided by NAR.
Foreign Buyers of US Real Estate
The number of foreign buyers of US real estate per year.
Source: NAR, Better Dwelling.
Foreign Buyers Are Buying Cheaper Homes
Foreign buyers are on a bit of a budget these days, opting for cheaper homes than they have in the past few years. The average sale price to foreign buyers fell to $426,100 in 2019, down 6.22% when compared to a year before. This is a huge decline from the peak average of $536,900 in 2017, which means we’re now 20.63% lower. This is the lowest average sale price for foreign buyers since 2014. It’s only been half a decade since it was this low, could be worse… right?
US Foreign Buyer Average Purchase Price
The average purchase price made by foreign buyers of US real estate.
Source: NAR, Better Dwelling.
Four Out Five Top Foreign Markets Are Down From 2017
Just five countries make up a large segment of foreign buyers of US real estate. China, Canada, India, Mexico and the United Kingdom (UK) represent 39% of all foreign sales. China represented 19,900 of the foreign sales, down 50.74% from the year before. Buyers from Canada followed also with 19,900 sales, down 27.37% from last year. India was the third largest market with 15,900 sales, up 21.37% from last year. Mexico was fourth with 9,700 of the sales, down a whopping 51.98% from last year. The UK came in fifth with 5,200 sales, down 42.22% from last year. Except for India, all of these markets have fallen in volume since at least 2017.
Foreign Buyers of US Real Estate By Market
The number of foreign buyers of US real estate, by market.
Source: NAR, Better Dwelling.
Foreign buying of US real estate has declined for the past few years, as prices increased. Now US prices are stagnating in growth, making it a much less attractive investment. Combine that with mounting concerns over a global recession and increased capital controls, and this wasn’t hard to see coming.
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Must be the foreign buying rules in Canada… which caused the exact same decline in volumes as places with no policy changes apparently. Funny how that works.
Or maybe… it wasn’t the Chinese who were hoovering up the inventory at all.
Nah.
Chinese capital controls greater than any domestic policy. Investment peaked in the same year China layered on new controls.
Curious to know what the trend is for Canada?
It’s about cut in half in BC for what it’s worth .