Increase in International Investors buying U.S. Homes

June 13, 2012

House made up of moneyAre you wondering who is buying properties in the current housing market? A growing number of investors in the nation’s real estate market are not actually residents of the country. Canada, China, Mexico, India and Britain, among other international investors, have flocked to the U.S. housing market, eager to take advantage of low prices.

According to a report by the National Association of REALTORS®, total sales volume of international clients purchasing U.S. properties for the 12 months ending March 2012 is estimated at $82.5 billion compared to $66.4 billion for the 12 months ending March 2011.

China, Canada, Mexico, India and Britain accounted for 55 percent of international home sales market purchases. Fifty-one percent of the international investors purchased properties in Arizona, California, Florida, and Texas.

Proximity to the home country was a major factor in where investors purchased U.S. residential real estate. The East Coast attracted European investors while the West Coast attracted Asian investors. Homes in Florida attracted investors from South America, Canada and Europe.

So what makes U.S. homes so attractive to international investors? Non-U.S. investors cite portfolio diversification, vacation purposes and a home for children studying in the U.S. as major factors in their decision.

Other reasons for the increase in international investors purchasing U.S. real estate include:

  • The houses are less expensive compared to their home country.
  • Low prices and high inventory of homes.
  • Moved because of their employment.
  • To escape turmoil in their country.

Single-family homes are far and away the most attractive real estate to international investors with 66 percent of sales going to detached single-family homes in 2012. Condos made up 23 percent of sales while townhouses took in 7 percent of sales from international investors for 2012. Fifty-two percent of international investors purchased homes in the suburbs compared to 23 percent who bought homes in urban areas.

Problems that international investors face when trying to purchase U.S. properties include lack of U.S. based credit history, no Social Security number and difficulties in meeting mortgage requirements. However,  62 percent of international investors who could purchase U.S. homes did so with cash.

Read the National Association of REALTORS® report to find our more information.

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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