Foreign buyers see the U.S. as a stable and secure real estate market. According to a recent survey by the National Association of Realtors, international home sales in the U.S. are at their second highest level in recent years, signaling that owning property in America continues to be a great investment.
By sales volume, Arizona is third in the nation for home purchases made by foreign buyers, behind Florida and California. Other states claiming a large share of foreign home buyers include Texas and New York. Together, these five states made up 61 percent of all foreign buyer transactions.Over the past five years, more than 70 percent of Realtors reported a constant or increasing level of contact by international clients wanting to purchase properties. From April 2014 to March 2015, total foreign sales dollar volume was estimated at over $104 billion.
A quick look at the top four states for home purchases made by foreign buyers — California, Florida Arizona, and Texas — signals that warm weather might play a role in the decision of where in the U.S. foreign buyers will purchase homes. However, other factors play a large role as well. Proximity to the home country, presence of relatives and friends, and job and educational opportunities are important considerations for international buyers.
Realtors reported purchases from 68 countries, but five have historically accounted for the bulk of purchases: By transaction share those are Canada, China, Mexico, India and the United Kingdom. These five countries accounted for 53 percent of transactions, with Canada and China the fastest growing sources over the years.
Not all countries are equally represented in Arizona, though. In fact, Chinese buyers, who recently surpassed Canadians as the top country of origin for international purchases of U.S. homes, do not rank Arizona as one of their top eight states for home purchases. California sees the bulk of Chinese buyers (35 percent), but states such as Washington, New York, Massachusetts, Illinois, and even New Jersey see larger shares of Chinese home buyers than Arizona.
In Arizona, Canadians make up the majority of international home buyers (46 percent). In contrast to Chinese buyers, who are purchasing primary residences, Canadian buyers are mostly buying vacation homes or rental properties. Our Canadian buyers are also showing an increased interest in buying condos and apartments over single-family homes.
In Florida, Arizona’s biggest competitor for Canadian buyers, almost a quarter of the total dollar volume of the residential home market is attributed to international buyers. While the majority of those buyers are purchasing in Miami, Canadians seem to prefer the Sarasota-Venice area and Palm Beach.
Foreign buyers of Arizona real estate are an important part of the real estate and housing economy in our area. On average, foreign buyers spend $499,000 on their real estate purchases, versus $255,000 for all other buyers. In addition to the increased purchase price, the economic impact of a home purchase in Arizona is estimated at over $52,000 per home, attributed to things such as purchasing furniture, remodeling, greater spending at restaurants, and more visitors at sporting events.
Attracting foreign buyers to Arizona — and specifically increasing the number of foreign buyers purchasing primary residences in Arizona — is an important part of our economy.
Working with an international buyer can require experience and a specific skill-set. Realtors have a global perspective, as well as expertise and knowledge of working with clients from different cultures and real estate practices; so international buyers using a Realtor are at a true advantage. NAR helps Realtors expand their businesses globally by offering resources such as the Certified International Property Specialist designation.