Residential mortgages among immigrants and international purchasers reached a new record this year. According to the National Association of Realtors' 2017 Profile of International Activity in U.S. Residential Real Estate, foreign investors bought $153 billion worth of residential property between April 2016 and March 2017. This number is up 49 percent from 2016's $102.6 billion.
The majority of these sales occurred in three states: California, Florida and Texas. China was the top investor in American property (a trend that has lasted four years so far), but what's particularly noteworthy is that Canadian purchases also peaked this year to reach $19 billion. NAR Chief Economist Lawrence Yun posited the theory that Canadians are attracted to American properties which, although still technically expensive, are cheaper than many homes in their country. Overall, the top five nations that spent the most were:
"The political and economic uncertainty both here and abroad did not deter foreigners from exponentially ramping up their purchases of U.S. property over the past year," said Yun of the survey's findings. "While the strengthening of the U.S. dollar in relation to other currencies and steadfast home-price growth made buying a home more expensive in many areas, foreigners increasingly acted on their beliefs that the U.S. is a safe and secure place to live, work, and invest."
The Washington Post investigated the trend of increasing Chinese investments made in American property and its impact on the market. In particular, the number of Chinese buyers purchasing homes in the San Francisco Bay Area has almost doubled since 2013. Meanwhile, home prices in that area have increased by double digits since 2012. Additionally, Chinese buyers are purchasing a large number of homes in New York City, many of them concentrated within the boroughs of Brooklyn and Queens.
Separately, CityLab noted that Chinese purchasers are flocking to college towns. As their children attend American schools, their parents decide it's a better option to buy. Susan Wachter, co-director of the University of Pennsylvania's Institute for Urban Research, explained their reasoning saying it makes more sense to spend three or four years' worth of rent money on property.
"[They're] going to come visit it anyway," she added.
That said, it is possible this trend could slow over the next few months both for Chinese buyers and those in other countries. Yun remained optimistic noting that strengthened economies across the globe should keep demand high. However, he did acknowledge two reasons why the opposite may happen:
As such, it's uncertain what the NAR's survey will reveal next year.
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