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Old Posted Jul 6, 2016, 7:54 PM
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ChargerCarl ChargerCarl is offline
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Foreign Interest in US Homes Cools



Quote:
Miami condo developers, California realtors and others in the housing industry have hoped recent turmoil in the global economy would boost foreign interest in U.S. real estate. New figures suggest the opposite is likely.

Purchases of U.S. residential real estate by foreigners who aren’t residents of the United States fell by $10 billion in the year ending March to $44 billion, the lowest level since 2013, according to a survey by the National Association of Realtors released Wednesday.

A strong U.S. dollar and weakening economies in Europe, South America and China along with rising U.S. home prices have hurt the purchasing power of foreign buyers. Tighter restrictions by the Chinese government on moving money out of the country also have made it more difficult for people there to buy U.S. homes.

The survey looks at two categories of foreign buyers: recent immigrants and non-residents. Purchases by immigrant foreigners actually rose to $59 billion from $49 billion, according to the trade group. The share of non-resident buyers decreased to 41% from about 50% in previous years.

Foreigners also bought less expensive homes than they did in the prior year. The average price of homes purchased by foreign buyers fell to about $480,000 from nearly $500,000 in 2015, largely because immigrants tend to buy less expensive homes than affluent non-residents purchasing investment or vacation properties.

While foreigners make up a tiny share of the U.S. housing market, they are critical to small, lucrative segments of the industry. Miami and Manhattan developers are relying on foreign buyers to help fill a swell of high-priced condos coming to market in the next couple of years. The high-end housing market in San Francisco and southern California also gets a significant boost from foreign purchasers.

For the second year in a row Chinese buyers were the top purchasers of U.S. properties, buying $27 billion worth of residential property, or about one quarter of the dollar volume of properties sold to foreigners. That was down from nearly $28.6 billion last year, the first annual decrease since 2011.

That activity also was driven largely by recent immigrants, not non-residents investing in property abroad. Only 39% of Chinese buyers were non-residents, down from 47% last year.

Not being able to find a property was the top reason for deciding not to purchase. That was followed by cost, an inability to obtain financing and the exchange rate. The median existing home price in March 2016 was up 24% from a year earlier for a buyer from Brazil and 10% for buyers from China and Canada, factoring in currency depreciation.

“Their currency has much weaker purchasing power now than before,” said Lawrence Yun, chief economist at NAR. “They are more sensitive to price points now than before.”

The results are based on a survey of realtors of their transactions conducted in the year ended March 2016.
http://blogs.wsj.com/economics/2016/...s-homes-cools/

So much for "unlimited" foreign demand!
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