Foreigners Taking More Interest in US Properties
Russian billionaire Yuri Milner paid $100 million for a French chateau-style mansion in Silicon Valley this spring. This has already set a record for the highest price ever paid for a single-family home in the U.S.
Though foreign buyers usually purchase about 7% of the U.S. residential real estate market, the numbers have recently swelled up. According to the National Association of Realtors, 18% of Realtors in the U.S. market have sold a home to at least one foreign buyer in 2010, up from 12% in 2009.
The framework of these buyers is changing, which is certainly reflecting the changes in the world economic scenario. The market has again gained the confidence of the Russian buyers, and the numbers are growing from Brazil where the economic growth was 7.5% last year. Further, Australians are also buying ski homes in Aspen, and Venezuelans are buying highly discounted beach condominiums in Tampa. However Canadians are still the major foreign buyers in the U.S. representing about 23% of foreign purchasers, which has grown from about 17.6% in 2009.
In Orange County, California, real estate broker Steve High says that Chinese buyers are now acquiring more than half of his showings in Newport Coast. He further goes on saying that Chinese buyers are now buying brand-new houses of more than 10,000 square feet to either use for vacations or place for their children to live when they will be attending colleges. Steve says that many of the houses there are lying vacant, or an 18-year-old kid is living in the house by himself.
What is happening now is that many foreign buyers are taking the advantage of the weakening dollar. However, not all foreign buyers are dishing out millions to buy property in the U.S. According to the National Association of Realtors, the median price paid for a home by a foreign buyer was just under $220,000, which only shows how much properties have come down since the United States housing bubble started to deflate in 2005. Six years on many analysts predict there’s more downward movement in prices to come before it gets any better.
About The Author: This article has been written by Angela Sanders, and edited by Refinancing.com.au. Sanders is associated with Mortgage Fit Community. She writes articles on various financial topics, such as Debt, Credit, Mortgage, Refinancing, Home Loan Modification, Investment Opportunities and Monetary Policies etc.