Connect Magazine January/February 2018 | Page 11

BY JULIANA DACOSTA , REAL EDGE REAL ESTATE
All data originated from the 2017 National Association of Realtors ® survey .
RESIDENTIAL PROPERTIES PURCHASED BY FOREIGNERS
Foreign buyers purchased $ 153 billion in residential property from April 2016 - March 2017 , an increase from $ 102.6 billion during the previous 12-month period ( April 2015 - March 2016 ).
China remained the top country of origin for foreign buyers , followed by Canada , the United Kingdom , Mexico , and India .
Although foreigners purchased property nationwide , five states accounted for 54 % of total residential property purchases : Florida ( 22 %), Texas ( 12 %), California ( 12 %), New Jersey ( 4 %), and Arizona ( 4 %).
Nearly half of foreign buyers purchased the property as a primary residence .
Most non-resident foreign buyers made an all-cash purchase ( 72 %), while a smaller fraction of resident foreign buyers paid all cash ( 35 %).
RESIDENTIAL PROPERTIES SOLD BY FOREIGNERS
The majority of international clients who sold their U . S . residential property originated from Canada , China , India , Mexico , and the United Kingdom . Properties owned by international clients sold for an average of $ 469,381 , with a median of $ 286,786 .
29 % of Realtor ® respondents reported working with international clients , about the same percentage as in the previous 12-month period .
35 % of Realtor ® respondents reported an increase in the number of international client transactions from the previous year . 48 % reported the number stayed about the same , and the rest reported a decline .
40 % of respondents reported “ don ’ t know ” about the outlook in the next 12 months , an increase from the 17 % share in the 2016 survey . Some respondents reported they are concerned about the policy changes on immigration , trade , and international relations .
Personal contacts , previous clients , and business contacts were the major sources of clients / referrals ( 64 %).
17 % of respondents have been in the business for less than one year , up from less than one percent in 2010 . This is a positive indicator of the strengthening U . S . real estate market . However , it also indicates the need for additional training and information for Realtors ® who are interested in cultivating and growing their business in this niche market catering to international buyers and sellers .
In a December 2016 Fortune Magazine article about trends in the U . S . economy , Chris Matthews wrote , “ If the U . S . economy is to hit escape velocity in 2017 , you can expect the real estate sector to serve as its rocket fuel . At its most broadly defined , housing can be counted on to compose 15 % of GDP . It hasn ’ t done that much heavy lifting lately , however . That ’ s because in the wake of the real estate bubble , lending standards have remained tight , while the cautious builders who survived the crisis have been reluctant to dive headfirst into expanding their operations again . But there are signs that these trends are about to change .”
As evidenced by the statistics above , Florida is the most popular state in the U . S . for foreigners to purchase real estate ! Plus , we have the 4th best tax climate for businesses , so that is attracting more people to our state as well . Additionally , the Florida job growth rate went up 3 % between 2016 and 2017 .
According to Ted C . Jones , PhD , the chief economist for Stewart Title Guaranty Company , the average price point for buyers from Canada was $ 332,072 , China was $ 936,615 , India was $ 420,352 , Mexico $ 266,188 , and the United Kingdom was $ 598,182 . The average for all countries combined was $ 477,462 . Also , according to a NAR survey , the average purchase price of foreign buyers was $ 477,500 and existing home sales was $ 266,700 . All the statistics researched corroborated the NAR survey first referenced . We as Realtors ® are fortunate to have all the information and resources available , to work with the large number of international buyers that have been and continue to be attracted to our Southwest Florida communities .
RPCRA . ORG | JAN / FEB 2018 11