Top Three States Where Foreigners are Buying

According to an annual survey by the National Association of Realtors, foreign investment in real estate is at new highs. Between April 2016 and March 2017, $150 billion of residential property was purchased by foreign buyers and foreign immigrants. To put this in perspective, in 2016 only 102.6 billion was purchased making a 49 percent jump between 2016 and 2017 and an overall 284,455 properties, which is 32 percent more than 2016.

“The political and economic uncertainty both here and abroad did not deter foreigners from exponentially ramping up their purchases of U.S. property over the past year,” said Lawrence Yun, NAR Chief Economist. “While the strengthening of the U.S. dollar in relation to other currencies and steadfast home-price growth made buying a home more expensive in many areas, foreigners increasingly acted on their beliefs that the U.S. is a safe and secure place to live, work and invest.”

China maintained its top position for the fourth straight year, but buyers from Canada raised significantly from 8.9 billion in 2016 to $19 billion this year. According to Yun, this is because though property in the U.S. is expensive, it is still more affordable than property in Canada. Home price gains have been even steeper than the U.S. The top five countries buying were China (31.7 billion), Canada ($19.0 billion), the United Kingdom ($9.5 billion), Mexico ($9.3 billion), and India ($7.8 billion).

Three states experienced the bulk of the foreign investment activity. Florida (22 percent), California (12 percent), and Texas (12 percent) took over half of the activity followed by New Jersey and Arizona, both at 4 percent. Canadian buyers favored Florida, while Chinese chose Florida, and Mexican buyers preferred Texas.

Regardless of the current robust level of foreign buyer demand, Yun believes the shortage of homes for sale and economic and political headwinds could slow buying activity.

“Stricter foreign government regulations and the current uncertainty on policy surrounding U.S. immigration and international trade policy could very well lead to a slowdown in foreign investment,” said Yun.