Every so often, a piece of information comes around to show that the U.S. housing market, despite some challenging trends, is by no means entirely on shaky ground, and recent data on foreign buyers would seem to suggest such a bright spot.
In 2010, foreign buyers made up $82 billion of sales in U.S. real estate, an increase of $16 billion from 2009, and the numbers will undoubtedly be higher in 2011.
Susan Wachter, a professor of real estate and finance at The University of Pennsylvania, said in a MSNBC article on foreign investment that international buyers’ focus on cash is a major positive.
“Housing is more affordable than ever,” Wachter said. “It’s difficult to get credit now but international investors come with cash.”
In an interactive map of the U.S. provided by Credit Sesame, the MSNBC piece showed how international investment influences the various states. In Illinois, for instance, 3 percent of the country’s foreign purchases occur, with buyers from Mexico, India, Poland, China and the Philippines as the top five nationalities. In Texas, 9 percent of foreign purchases, and Mexico, India, Vietnam, China and the Philippines yielded the top five buyers. No state, though, can match Florida, where an incredible 31 percent of foreign purchases in the U.S. occur, with the top five countries being Cuba, Haiti, Columbia, Jamaica and Venezuela.
In addition to all-cash financing, the relatively cheap nature of U.S. housing also plays a big role in foreign investment. A report from last fall, also by Credit Sesame, highlighted the surprising affordability of American housing on the worldwide scene. According to the report, the most expensive real estate in the U.S., the $1,068 per square foot price tag in Manhattan, paled in comparison to other cities, such as the $1,561 per square foot in Singapore, $1,563 per square foot in Luxembourg, $1,590 per square foot in London, $2,099 per square foot in Oslo, and finally, the $3,287 per square foot in Paris, the costliest metropolitan real estate market in the world.
Understandably, then, Wachter also said that U.S. real estate is seen as a good investment. “In this period of tremendous uncertainly globally, real estate here is a safe haven,” she said.
And members of Congress have been attempting to cash-in on that demand. In late October, Sens. Charles Schumer and Mike Lee made waves with their foreign real estate investment bill, which would offer visas to foreigners who invested at least $500,000 in U.S. real estate.