Miami Top Market in the Record Setting $92 Billion International Investment in US Housing

Miami Top Market in the Record Setting $92 Billion International Investment in US Housing

 For the period, April 2013 through March 2014, total international sales have been estimated at a record-setting $92.2 billion, an increase from the previous period's level of $68.2 billion according to the National Association of Realtors. International Buyers have decided to purchase properties and make real estate investments due to the favorable exchange rates, affordable home prices mainly but also due to factors such as weather, family, friends, job or educational opportunities and so on.

International buyers and recent immigrants purchased homes throughout the country, but four states accounted for 55 percent of the total reported purchases - Florida, California, Arizona and Texas . Florida remains the destination of choice, claiming a 23 percent of all foreign purchases. California comes in second with 14 percent, Texas with 12 percent and Arizona with 6 percent. According to Realtor.com, the top five cities searched online by international buyers in 2014 were Los Angeles, Miami, Las Vegas, Orlando and New York City of course.

 Foreign buyers take many factors into consideration when deciding where to purchase abroad, such as proximity to their home country, the presence of relatives and friends, job and educational opportunities, and climate and location. European buyers are generally attracted to states with warmer climates such as Florida and Arizona while the West Coast tends to attract Asian purchasers. Indian buyers tend to gravitate towards states that are home to large information technology companies, such as California, New York and North Carolina. Within markets in an individual state, it is not unusual to find concentrations of people grouped by nationality, possibly indicating that word-of-mouth and shared experiences influence purchases.

International buyers are more likely to make all-cash purchases when compared to domestic buyers. In 2014, nearly 60 percent of reported international transactions were all cash, compared to only one-third of domestic purchases. Mortgage financing tends to be a major problem for international clients due to a lack of a U.S. based credit history, lack of a Social Security number, difficulties in documenting mortgage requirements and financial profiles that differ from those normally received by financial institutions from domestic residents.

Most homes purchased by foreign buyers, about 42 percent, are used as a primary residence. Non-resident foreigners are limited to 6-month stays in the U.S., so these buyers largely use the property for vacation or rental purposes or as an investment. Approximately 65 percent of purchases involved a single-family home. Nearly half of international clients preferred properties in a suburban area, about a quarter preferred a central city or urban area, and about 13 percent choose to purchase in a resort area. * NAR & World Property Channel.

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