The worldwide recession and scarcity of credit caused sales of homes to non-U.S. Citizens to drop by 9.4% between May 2008 and May 2009, the National Association of Realtors reported Tuesday.
According to an NAR member survey, an estimated 154,000 homes were sold for a total of $38.7 billion to international buyers during the 12 months ending May 31, 2009, down from 170,000 for the 12 months prior. The median price of homes sold to international clients was $247,100, significantly above the national median price of $198,100. Nearly half of the sales--45.8%--were cash deals.
A third of foreign buyers purchased U.S. homes as vacation properties, the NAR said, with 23.5% viewed as both vacation and investment properties.Another 18.3% were purchased as investments in residential rental property.
The survey showed 69% of international purchases were single-family homes; condos accounted for 18%. Townhouses made up 8% of transactions, with commercial property at 4%. Nearly 46% were suburban properties; 25% were in urban areas. The rest were evenly split between resorts and small towns or rural areas.
Not surprisingly, the most popular second-home destination for foreigners was Florida, which accounted for 23.0% of purchases. California was next at 13.0%, followed by Texas at 10.7% and Arizona at 7.1%.
The top five countries of origin for foreign buyers were Canada (17.6%), the United Kingdom (10.5%), Mexico 9.8%, ; India (8.5%) and China (5.4%).The percentage of buyers from Canada, the U.K. and China declined from the previous study, while purchasers from Mexico and India increased.
Florida was the most popular state for European and Latin American buyers, with Asian buyers drawn to California, the NAR said.
The Realtors expect the international market to snap back as global economic conditions improve. "Stock market gains and improving bank balance sheets will permit a greater amount of lending for second home purchases," said Lawrence Yun, NAR chief economist. "In addition, expanding foreign economies for international buyers and favorable exchange rates give them more purchasing power, particularly in a period of record high affordability conditions in the United States."