Since 2007, the National Association of REALTORS® (NAR) has conducted a yearly survey to measure the sales of U.S. residential real estate to international clients. The survey provides information about the origin, destination, and buying preferences of international home buyers in the U.S. as well as the challenges and opportunities faced by REALTORS® in the international market.
Below are some of the key findings of the 2016 Profile of International Home Buying Activity.
High International Sales Volume
For the period of April 2015 – March 2016, the amount of total home sales to international clients was estimated at $102.6 billion. While this is a slight decrease (1.25%) from the previous year, this was expected due to slowing economic growth in many countries and higher home prices in the U.S. due to the strengthening of the U.S. dollar.
Five Countries Account for 45% of International Purchases
International home buyers in the U.S. came from nearly all over the globe, but there are five countries that accounted for the largest amounts of U.S. home purchases – China, Canada, India, Mexico, and the United Kingdom. These five countries comprised over 45% of total purchases by international buyers!
China Leads the Pack for Unit and Dollar Volume
For the second year in a row, China far exceeded all other countries in terms of dollar volume and units purchased, accounting for an estimated $27.3 billion in sales. This number is nearly 27% of all total international sales by dollar volume. Much of this can be attributed to the fact that Chinese buyers typically purchased the most expensive properties at an average price of $936,615 – nearly 4x the average U.S. home price of $266,683.
Top Destinations for International Buyers
Florida, California, Texas, Arizona, and New York remained the top five states attracting international clientele. Together, these five states accounted for 51% of purchases by international buyers. When deciding where to purchase U.S. property, top considerations for international buyers included proximity to the home country, the presence of relatives, friends and associates, job and educational opportunities, and even climate.
Importance of Working with a REALTOR®
Serving international clients requires surrounding yourself with a great team of people who possess knowledge relating to immigration, tax, property, financing, and other international regulations. Of course, international etiquette is also a huge piece of the puzzle. It’s critical to build trust with each of your clients and in dealing with someone from outside the U.S., you want to consider their local customs before your own. Taking the extra step to demonstrate that you understand and respect their culture will make you stand out from the competition. According to Tom Salomone, NAR President and broker-owner of Real Estate II Inc. in Coral Springs, Florida:
Especially in the local markets attracting a hefty share of international buyers and sellers such as those in California, Florida and Texas, it’s advantageous for REALTORS® to consider earning the Certified International Property Specialist, or CIPS, designation. The specialized training on critical aspects of an international transaction such as exchange rate and tax issues and regional market conditions best prepare REALTORS® for the increasingly globally connected world of real estate.
Download and share our infographic on the state of international home sales in the U.S.:
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