International Homebuyers Invest $82.5 Billion in U.S. Real Estate

by Houston Agent

International business is making up an increasingly large share of real estate transactions in the U.S.

Total international residential sales in the U.S. was $82.5 billion in the past year ending on March 2012, a 24 percent increase from 2011.

According a new report from the National Association of Realtors, a number of factors have contributed to the high international demand, among them competitively-priced homes in the U.S. and the relative weakness of the dollar to foreign currencies. Want to know more? Here were the most interesting parts from the report:

  • Sixty-two percent of international buyers paid all cash, a percentage that has steadily gone up since 2007.
  • Twenty-seven percent of agents reported they have worked with international clients in 2012, and 27 percent also reported that international transactions made up more than 10 percent of their total transactions.
  • Specializations played a huge role in agents’ success with international buyers, with foreign language skills, cultural affinity or orientation with the prospective purchaser and experience being key qualifications.
  • Canadians accounted for 24 percent of total sales, while China accounted for 11 percent (up from 9 percent in 2011), Mexico for 8 percent and India/United Kingdom for 6 percent.
  • Fifty-five percent of agents reported clients were referred to them through friends, previous clients, and international and domestic referrals. Cody Phillips, a Prudential Gary Greene agent who works in Houston’s Midtown, Inner Loop and Woodlands communities, said word-of-mouth is by far the most common referral for him and other agents he knows. As old fashioned as it is, Phillips said some agents cannot handle all the leads they are receiving, many of them from South American buyers. “A lot of people are just tripping over the leads, crazy as it sounds,” he said. “After those first few, the ball really starts rolling.” A big part of that, Phillips added, is the loyalty many foreign buyers show – once an agent works with one buyer, they are prone to work with the buyer’s cousins, sons, daughters, co-workers and many other acquaintances.

Foreign buyers are clearly an ever-growing force in today’s housing market, but does anyone wonder if it’s more a “today” situation than a “tomorrow”? For instance, will European buyers still be purchasing homes with as much fervor when the Eurozone crisis is resolved? Or, will the values in the U.S. continue to be irresistible for international buyers?

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