Purchases from Chinese buyers have plummeted 84% since peaking in 2017.

By Wolf Richter for WOLF STREET.

US purchases of existing homes by foreigners – used homes, not new homes – were up 27% year over year from April 2020 to March 2021 to 54 billion 65% from the 2017 peak ($ ​​153 billion) , according to today's National Association of Realtors annual report on overseas buyers. Foreign buyers have gotten cold feet and face other hurdles like capital controls, especially buyers from China.

These buyers fall into two groups: resident foreigners who bought $ 32 billion worth of homes from the summit during the period:

These purchases accounted for 2.8% of total existing home sales during the period. During the peak in 2017, they accounted for 10% of total home sales, according to the NAR.

Resident Foreign Buyers Are non-US citizens who have recently immigrated and have been in the US for less than two years at the time of purchase; or nonimmigrant visa holders who have been in the United States for more than six months for work, school, or other reasons.

Non-Resident Foreign Buyers are non-US residents permanently outside the US who typically shop for investments, vacations, or visits less than six months on a nonimmigrant visa.

The total number of buyers decreased 31% year over year to 107,000 buyers, the fourth year in a row of declines and 62% less than 2017.

The five most important countries of origin, the number of homes bought and the change compared to the prepandemic year 2019 and from 2017:

  1. Canada: 8,800 homes, -56%; -74%
  2. Mexico: 7,100, -55%; -75%
  3. China (the report includes Hong Kong and Taiwan): 6,300 households, -68%; -84%
  4. India: 4,700, -52%; -68%
  5. UK: 3,800, -27%; -70%.

However, the Chinese buy more expensive homes on average and rank first in terms of dollar volume of their purchases, followed by Canada, India, Mexico and the UK.

The top five US states in terms of their share of all overseas buyers:

  1. Florida (22%)
  2. California (16%)
  3. Texas (9%)
  4. Arizona (5%)
  5. New York (4%)
  6. New Jersey (4%)

Top destinations for buyers from:

  • Canada: # 1 Florida (38%); # 2 Arizona (24%).
  • China: # 1 California (34%); Georgia (10%).
  • Mexico: # 1 Texas (29%); # 2 California (21%).
  • India: # 1 California (40%); # 2 Texas (11%)
  • UK: # 1 Florida (44%); # 2 Virginia (21%)

They buy more expensive houses than Americans. Median price according to origin, plus the percentage change compared to the previous year. All five are above the median US price of $ 305,500 (+ 11%):

  • India: USD 538,900; + 20.2%
  • China: 476,500; + 6%
  • Canada: 400,900; + 37%
  • UK: 366,600; + 2%
  • Mexico: 341,400; + 36%

That slump in overseas purchases began in 2018, and the pandemic year was the fourth straight year of declines. Every year the residential real estate industry hopes that overseas buyers, especially from China, will reappear in large numbers. And for the past four years they have been disappointed. All of the major US real estate agents have departments in China with Chinese language websites and with employees in China trying to get Chinese buyers and Chinese money into the US real estate market. All hopes now rest on the lifting of travel restrictions between countries and, of course, in the case of China, on the lifting of capital controls by the Chinese government.

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source https://seapointrealtors.com/2021/07/27/us-home-purchases-by-foreigners-plunged-for-4th-year-to-decade-low-but-they-bought-more-expensive-homes-than-americans/

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