New Customers for US Real Estate

Hey Everyone, hope the weekend was good to all of you!


     As we are all aware of this, our housing market in the United States has taken quite a big hit these past years; led by the burst of the housing bubble, as I have explained previously in my posts. Overall, the US economy has not been fairing too well either creating a loss of jobs and less money to be spent. This has opened up a huge opportunity for foreign buyers in US real estate. “Foreigners purchase for a variety of reasons: trophy homes, desire to put money in the U.S. for safety, desire to have a place to visit for vacation, desire for a rental unit,” Jed Smith, an NAR economist, told NBC News. “These
factors … tend to dampen the effects of changes in total overall cost." Opportunity coupled with financial ability and desire is creating an influx of foreign buyers. 

     Now that I have explained the "why" it is time to find out the "who" question. There are two main countries pursuing US real estate right now, both holding their own amidst the worldwide economic problems, and both dealing with the US frequently; these countries are China and Canada. Canada for obvious geographic reasons and China because they own most of the US debt due to the fact that their economy is currently being supported a lot by the US economy; that is until they become economically independent (but that's another story all in itself). These countries currently have strong economies and have found "gold" in US real estate.  Canada and China are the main foreign powers that are capitalizing on the low real estate prices in the US, while mexico and the UK are also in the mix. Foreign purchases in the US have increased 24 percent since 2011. From March 2011 to March 2012 the Canadians captured the largest US real estate market share in terms of foreign purchasers, being responsible for 24 percent of all foreign purchases in the US. According to realtor.com the Canadians are focusing on Miami, Fort Lauderdale, and Orlando (all vacation spots). On the other hand, the Chinese account for 11 percent of foreign purchases, but they are targeting the opposite side of the US; mainly Los Angeles and San Francisco. The targeted homes for UK consumers have a median size of 2,342 sqft (American median home size 1,854 sqft) so they may perhaps be coming to the US real estate market because of their interest in McMansions and larger homes, which the US has plenty of. “The rest of the world might make fun of Americans for our big portions, big homes, but it turns out that most foreigners look at bigger homes than what most Americans look at,” Jed Kolko, Trulia chief economist, wrote in a blog last week.

source: nbcnews