Rich Foreign Buyers Call U.S. Housing Market ‘Excellent’
Wealthy international investors once again have their eyes on U.S. real estate, with 80% saying it’s a “safe investment” and the majority calling current market conditions “excellent” or “good,” according to a new survey(link is external) from Global Luxury Coldwell Banker Real Estate. The positive sentiment among international buyers is significantly higher than that of domestic buyers: Fannie Mae’s Home Purchase Sentiment Index neared an all-time low in February, driven by concerns about homeselling conditions, mortgage rate concerns and job security. Seventy-nine percent of U.S. consumers said it’s a bad time to buy a home, Fannie found.
For international buyers, who tend to purchase in cash, “the dream [of homeownership] is alive and well,” says Liz Gehringer, president and COO of Coldwell Banker Affiliate Business. “Affluent buyers are flocking to diverse U.S. locations to enhance their portfolio diversification, with many opportunities for growth, investment and building long-term wealth.”
Investment opportunities as well as inspiration from the entertainment industry and social media may be inspiring more international buyers to purchase in the U.S., adds Michael Altneu, vice president of the Coldwell Banker Global Luxury program. A third of about 1,200 respondents to Coldwell Banker’s survey say they are motivated to purchase U.S. property because of frequent business trips, a recent vacation, social media, dual citizenship or being inspired by a U.S.-based movie or television series.
Late last year, a survey conducted jointly by Coldwell Banker Global Luxury, the Institute for Luxury Home Marketing and Wealth-X uncovered emerging trends in the luxury housing market, including the expected return of global buyers on a large scale in 2023.
The international attention is coming from several areas. The top international buyers in the U.S. (by dollar volume) in 2022 were:
- China ($6.1 billion)
- Canada ($5.5 billion)
- India ($3.6 billion)
- Mexico ($2.9 billion)
They appear to have their sights on Florida, California and Texas. (Read more: 2022 International Transactions in U.S. Residential Real Estate, an annual report produced by the National Association of REALTORS® that provides a snapshot of broader income levels in the international market.)
What International Buyers Want
International buyers are fairly evenly split on the type of property they’re most interested in purchasing in the U.S. About a quarter of survey respondents each showed a desire for a multifamily residence, single-family detached home or townhome. The following chart shows the most important desires among international respondents when selecting a property in the U.S., according to the latest Coldwell Banker Global Luxury report.
The survey shows that the countries most likely to call U.S. a “safe investment” in real estate are:
- Mexico (97%)
- Spain (92%)
- United Arab Emirates (92%)
- Costa Rica (87%)
- Turkey (84%)
- Argentina (81%)
- France (76%)
- Portugal (76%)
- Italy (72%)
The foreign buyers are looking to real estate professionals for help: 88% of respondents say they will use a real estate agent for their international purchase.