The US real estate market has reportedly seen an influx of international buyers, with many of them focusing on lower-value properties that can subsequently be rented to middle-class families. In the past, sales of US properties to foreign buyers have been largely limited to luxury real estate holdings; however, it seems that foreign buyers are now setting their sights on properties that cost less.
Immigrant foreigners are buying cheaper homes in the United States, according to real estate markets observers. Lawrence Yun, the chief economist for the National Association of Realtors (NAR), the country’s largest trade association, said that overall home purchases made by immigrant foreigners rose considerably. Yun explained that this increase in home sales to immigrant foreigners was met by reduced sales of U.S. real estate to nonresident foreigners. According to Yun, this can be explained by “weaker economic growth throughout the world, devalued foreign currencies, and financial market turbulence.”
The bottom line is that foreign buyers of real estate now face less competition in the United States market but also have fewer financial resources available to them. As a result, foreign buyers are going after cheaper properties in less-expensive markets.
The data backs up the belief by some financial and real estate experts that foreign buyers are targeting homes and other real estate properties in markets that are not as pricey. According to the annual NAR report on international activity in the US real estate market, the total amount of money spent by foreign buyers in 2015 declined by 1.3 percent, while at the same time the total number of properties rose by nearly three percent.
Rick Sharga, the executive vice-president of online real estate marketplace Ten-X, observed that foreign investors are steering clear of New York City and Washington, D.C. and “buying properties in smaller, less-expensive cities in the Southeast and Midwest.” As far as a state-by-state breakdown of the destinations being targeted by foreign home buyers, the NAR data indicates that New Jersey, New York, Florida, Texas, Arizona, and California account for almost 60 percent of all foreign-bought real estate holdings in the U.S., with many of the purchasers getting single-family rentals.
For additional information, read the CNBC.com article, “Foreign Buyers Flood US Real Estate, But Buy Cheaper Homes.”
If you are thinking about buying a home, or selling a home, in New Jersey, it is important for you to speak with a qualified real estate attorney before you get too far along in the process. Joel R. Spivack, Esq., is an experienced real estate lawyer who can assist you and answer any questions you might have. Contact Mr. Spivack today to schedule a free consultation.
