Sales to foreign buyers plummeted -31% during pandemic. Lowest international unit volume and dollar volume since 2011
US Home Sales to International Buyers Evaporated During Pandemic
US home sales to foreign buyers plunged -31% from April 2020 to March 2021, according to the National Association of REALTORS® (NAR).
Just 107,000 properties were sold to international buyers during this time period. Those meager international sales resulted in the lowest dollar volume and lowest unit volume since 2011.
Lawrence Yun, chief economist with NAR, said, “The big decline in foreign purchases of homes in the US in the past year is no surprise, given the pandemic-induced lockdowns and international travel restrictions. Yet, even with the absence of foreign buyers, the US housing market strengthened solidly.”
Top Five Countries in Sales Dollar Volume for US Home Properties
The top five countries that normally generate the most sales dollar volume for US home sales include China, Canada, India, Mexico and the United Kingdom. China, Canada and Mexico cut their respective dollar volumes by at least -50% during the pandemic. Only the UK increased its dollar volume from the year before.
China Is Country to Watch
Georg Chmiel, executive chairman of Juwai IQI, a home listing site in China that is comparable to Zillow in the US, said, “There has been quite a positive impact on the demand from the Biden boost, as the US is being perceived as much more predictable now, and visas are also much easier to be obtained. On the other side, and now that we are over a year dealing with the COVID pandemic, it has lessened the impact on the buying decisions because flights to the US are possible.”
Higher Home Prices May Be Incentive for Foreign Buyers to Buy
Almost counterintuitively, Chmiel believes that an increase of +15% in home prices over the past 16 months may incentivize international buyers to buy. Chmiel said, “…people start to feel they’re missing out.”
Chmiel also pointed out that even with that +15% price uptick, US homes are much less expensive than homes in Hog Kong or London.
International Buyers Continue to Prefer Tried and True Destinations for Home Buying
For the 13th consecutive year, Florida led the pack with 21% of all international purchases. California followed Florida with 16% of all international purchases. Texas followed California with 9%, then Arizona with 5% and New Jersey and New York tied at 4%. All of these states are seen as locations that are both safe havens for cash and as potential drivers for high returns on investments.
Chinese buyers specifically encourage their children to take advantage of higher educational opportunities in the US. NAR’s Yun said, “As travel restrictions loosen and foreign students return to US colleges in the upcoming year, there is likely to be some growth in foreign buying of US real estate.”
Thanks to the National Association of REALTORS® and CNBC.
