Foreign homebuying activity has decreased significantly over the last year, but economists are bullish that a comeback is starting to emerge.
During the pandemic, foreign investment in American homes plunged 27%, the lowest level in a decade, according to a recent report from the National Association of REALTORS®. The global pandemic and travel restrictions are the culprits for the decrease, housing analysts have said.
But as vaccines pick up globally, pent-up demand among foreign buyers is expected to be unleashed once again.
Already, there are some signs of a return in pockets across the country. A housing development in the Dallas-Fort Worth area saw 130 homes sold the first day that lots were released. Most of the buyers were investors from foreign countries snatching up properties in bulk.
Vickie Arcuri, a real estate pro in Florida, told USA Today that she already has noticed an uptick in foreign buyer interest. The number of visitors from other countries to her website doubled in 2021 compared with 2020. She’s also getting many clients from other countries asking to view properties through FaceTime, WhatsApp, and Zoom. She specializes in properties in Miami, Fort Lauderdale, and Palm Beach, Fla.
The most popular destinations for foreign real estate buyers between April 2020 and March 2021 were Florida, California, Texas, Arizona, New Jersey, and New York, according to data from the National Association of REALTORS®. Clients from China have been the top buyers of U.S. residential homes by sales dollar volume over the last decade.
According to NAR data, the median existing-home sales price for international buyers was $351,800 in March—15% higher than the $305,500 median price for all existing homes sold in the U.S. Housing shortages abound, which has pressed on home prices and made it more difficult for potential buyers to find a property.
“Not having as active a foreign buyer market last year was a welcome change, especially when we were dealing with a severe housing shortage,” Lawrence Yun, NAR’s chief economist, told USA Today. “Now with the vaccinations making progress, it’s inevitable that in the next 12 months, there will be a lot of interest.”
During the pandemic, the number of foreign buyers of U.S. real estate decreased. But it was “impressive” that the number of buyers stayed as high as it did, given the restrictions in place from the pandemic, Benjamin Keys, a professor of real estate in the Wharton School at the University of Pennsylvania, told USA Today.
Interest rates are low, millennials are buying more homes, and more Americans have been eager to buy during the pandemic. “Adding foreign buyers to the mix could mean that home prices in states such as Florida, California, Texas, New York, and New Jersey … will continue to soar, benefiting current homeowners and making it harder for those looking to enter the market,” USA Today said.