As the economy around the world improves, residential real estate is becoming more popular. In 2013, foreign buyers made up 35 percent of US residential real estate purchasers.
Most Prevalent Foreign Buyers
Chinese buyers topped all other countries, spendingnearly $22 billion on US homes in a 12-month period. According to a study by the National Association of Realtors, Chinese buyers made up 24 percent of total foreign sales. This is nearly double the amount from the previous year of $12.8 billion spent.
According to the NAR, international purchases of American homes jumped an outstanding $92.2 billion. This is nearly triple the amount from the previous year. Of all US real estate deals, foreign clients were involved in 7 percent of the transactions.
As the economy continues to improve, China has been rivaling the US as the world’s economic superpower. The sudden influx of Chinese buyers has been positive for US real estate,especially after the financial crisis in 2008, which causedthe housing market to struggle for several years.
Chinese buyers also paid an average of $523,148 for American homes. According to NAR statistics, homes purchased by Americans only averaged $199,575.
The NAR believes that Chinese buyers are the fastest growing sector in real estate next to Canada. Mexican buyers ranked third, making up 9 percent of sales. India and the UK are tied at fourth with 5 percent.
Chinese buyers have been purchasing homes mainly in California, the most popular cities being Los Angeles, San Francisco and Irvine. According to a survey by the California Association of Realtors, Chinese buyers made up 32 percent of foreign buyers in the state.
The Chinese aren’t the only foreign buyers to prefer sunny California residences. Buyers from Canada, India, England, Australia, Ireland and Russia have all invested in California real estate. The US housing market is expected to increase even further, as foreigners continue to buy American homes.
The Chinese housing market has been overheating. William Yu, an economist at UCLA, explained that Chinese buyers “want to diversify because the housing market over there is just way too hot.” Political instability in the country also factors into their decision to move overseas.
Yu stated, “There’s no trust in the rule of law. If they’re making money, smart people are going to try to keep the money here in case something happens in China.”
Perhaps the economy in China isn’t as much of a threat as the US originally thought. Last month, new home prices fell in China. Meanwhile, US house prices have been on the rise, increasing 26 percent since March 2012.
If you are buying a new home, consult with a real estate attorney before closing the deal. There are countless laws and regulations that must be observed and considered when buying a home. A real estate attorney can guide you through the process. With over 30 years of experience, Marc Simon can handle any complex real estate law. For more information about this Las Vegas lawyer contact 702.451.7077 or firstname.lastname@example.org.