International Buyers More Active

February 7, 2008

A growing number of Realtors are serving international clients - foreigners who are actively seeking residential properties in the U.S. This was revealed in the recently released "Profile of International Home Buying Activity," prepared by the National Association of Realtors. The top three state destinations for foreign homebuyers are California, Florida and Texas, but a significant number of overseas buyers are seeking properties in all areas of the country, the report noted.

The currency environment probably played a major role in the proportion of foreign buyers who paid cash for their homes. About 28 percent are paying cash - much greater than that of the general U.S. homebuyer population (8 percent). International buyers who can afford a home abroad often are from wealthier households with higher monthly incomes and cash reserves.

It should be noted that the tax benefits of mortgage interest deductions may not apply to foreign buyers, depending on the buyer’s home country’s tax code. This, of course, lowers the incentive to take out a mortgage. Buyers are coming from around the world to buy different types of properties at various prices. They plan on using their U.S. homes for different reasons. The typical international buyer purchased a single-family home or townhome. The primary purpose in purchasing the home was for use as a vacation venue for family and friends.

The typical foreign buyer in the U.S. spends 4.2 months in his or her U.S. property. U.S. visa rules allow non-residents (unless under a student or work visa) to remain in the country for only six months, the NAR report noted.

source: Jim Woodard

Posted in All Things San Diego, Lending, Real Estate, Things of Interest