2014 Profile of International Home Buying Activity
Summary of Report at
http://www.realtor.org/reports/profile-of-international-home-buying-activity
Lawrence Yun, Senior Vice President & Chief Economist
Jed Smith, Managing Director, Quantitative Research
Gay Cororaton, Research Economist
Dollar Volume Sales to International Buyers
Approximately 7 Percent of Total Market Dollars
Increases in 2014 Due to Rising Prices and Volumes
Estimated Sales Dollar Volume of U.S. Residential Property
to Foreign Buyers ( in Billion Dollars)
$92.2
$ 82.5
$ 66.4
2011
$68.2
2012
Estimate is for 12 month period April 2013 - March 2014.
2013
2014
Sales to Foreigners: Modest Growth
Approximately 5 percent of Total Residential Transactions
6000000
5000000
4000000
3000000
2000000
1000000
0
2010
2011
2012
Domestic
International
2013
2014
International Buyers: 7% of $1.2 Trillion Market
Five Countries: 54 Percent of Total International Sales
Estimate of International Sales from Major Buyers
( In Billion Dollars)
Canada
China
Mexico
India
United Kingdom
Total International Sales
2013
Sales ($) % Share
$11.8
17%
$12.8
19%
$3.6
5%
$3.9
6%
$4.2
6%
$68.2
2014
Sales ($) % Share
$13.8
15%
$22.0
24%
$4.5
5%
$5.8
6%
$5.8
6%
$92.2
Canada Leads in Number of Transactions
China Leads in Dollar Volume
Canada: $13.8 Billion; China: $22 Billion
Distribution of International Transactions by Country of Origin
30%
25%
20%
15%
10%
5%
0%
Brazil
Canada
China*
France
Germany
India
Japan
Mexico
Russia
United
Kingdom
2010
1%
23%
9%
3%
4%
5%
1%
10%
3%
9%
2011
3%
23%
9%
4%
4%
7%
2%
7%
1%
7%
2012
3%
24%
12%
3%
3%
6%
1%
8%
2%
6%
2013
2%
23%
12%
2%
3%
5%
1%
8%
2%
5%
2014
2%
19%
16%
2%
3%
5%
2%
9%
1%
5%
Transactions Concentrated in Four States
Percent of Total Foreign Transactions by State
Foreign Purchasers: Geographic Preferences
Canadians: Las Vegas, Detroit, Los Angeles, Ft.
Lauderdale, Miami, Orlando
Canadian Home Buyer Preferences
Percent Distribution of Total Canadian Purchases
Chinese: Los Angeles, San Francisco, Irvine, New
York, Las Vegas
Chinese Home Buyer Preferences
Percent Distribution of Total Chinese Purchases
40%
36%
35%
23%
21%
9%
10%
Florida
Arizona
California
3%
3%
Texas
Washington
Other
States
7%
6%
6%
Foreign Purchasers: Geographic Preferences
Indians: Los Angeles, Las Vegas, Chicago, Dallas,
New York
U.K.: Los Angeles, Orlando, Houston, Las Vegas,
Kissimmee
Indian Home Buyer Preferences
Percent Distribution of Total Indian Purchases
U.K. Home Buyer Preferences
Percent Distribution of Total U.K. Purchases
53%
45%
21%
17%
8%
8%
8%
12%
6%
9%
Florida
California
Texas
6%
6%
Maine
Maryland
Other
States
Florida Popular with Latin Americans,
Canadians, and Europeans
Distribution of International Clients Purchasing
in Florida
34%
28%
26%
8%
3%
2%
Middle East
Unknown
1%
Africa
Asia/Oceania
Europe
Latin America (inc
Mexico)
North America (exc
Mexico)
California: Popular with Asians and Canadians
Region of Origin of International Clients Purchasing
in California
62%
16%
13%
4%
1%
0%
Africa
Asia/Oceania
Europe
Latin America (inc
Mexico)
North America (exc
Mexico)
Middle East
3%
Unknown
Arizona: Particularly Popular with Canadians
Region of Origin of International Clients Purchasing
in Arizona
74%
11%
8%
3%
0%
Africa
Asia/Oceania
Europe
Latin America (inc
Mexico)
North America (exc
Mexico)
3%
3%
Middle East
Unknown
Texas: Popular with Latin Americans, Particularly
Mexicans
Region of Origin of International Clients Purchasing
in Texas
59%
18%
9%
5%
4%
Africa
Asia/Oceania
Europe
Latin America (inc
Mexico)
North America (exc
Mexico)
3%
3%
Middle East
Unknown
Foreign Sales Tend to be at Higher End of Market
Purchase Price
(Percentage Distribution)
Average Mean and Median Prices from April 2013-March 2014
U.S. Existing Home Sales
International Sales
Mean Price
Median Price
$247,417
$201,700
$396,180
$268,284
Percentage of Respondents With Clients
100%
90%
7%
7%
5%
12%
10%
13%
10%
15%
80%
70%
30%
28%
28%
60%
7%
15%
9%
16%
23%
29%
30%
50%
40%
30%
51%
56%
54%
54%
46%
45%
20%
10%
0%
2009
2010
2011
2012
2013
up to $250,000
$250,001 to $500,000
$500,001 to $ 1M
$ 1M up
2014
Prices Paid by Buyers Vary by Country of Origin
Purchase Prices of Top 5 International Homebuying Countries Based on Reported Transactions from
Apr 2013-Mar 2014
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$-
Canada
China
India
Mexico
United Kingdom
Median Price
$212,500
$523,148
$342,857
$141,071
$350,000
Mean Price
$314,718
$590,826
$459,028
$224,123
$499,242
Cash Sales Are in the Majority
Type of Financing
(Percentage Distribution)
Percentage of Respondents With Clients
100%
90%
36%
80%
52%
70%
60%
37%
35%
38%
44%
54%
69%
50%
40%
30%
20%
43%
55%
62%
62%
63%
60%
2010
2011
2012
2013
2014
46%
28%
10%
0%
2007
2008
2009
All cash (no mortgage financing)
With mortgage financing
Don't know
Foreigners Buy for a Variety of Reasons
Most Important Factor Influencing Purchase
Percentage of Respondents With Clients
(Percentage Distribution )
100%
8%
8%
7%
40%
39%
37%
29%
27%
31%
31%
20%
18%
21%
21%
22%
25%
2009
2010
2011
2012
2013
2014
8%
8%
9%
40%
45%
43%
90%
80%
70%
60%
50%
40%
32%
30%
31%
20%
10%
0%
U.S. real estate is viewed as a secure investment.
U.S. real estate is viewed as profitable investment.
U.S. is viewed as a desirable location.
Other
Not All Potential Foreign Clients Purchase a House
Foreigners Don’t Buy for a Variety of Reasons
Reasons for Not Buying
(Percentage Distribution )
Percentage of Responses
100%
90%
28%
21%
20%
80%
50%
21%
9%
25%
8%
26%
30%
20%
10%
0%
16%
21%
19%
7%
9%
29%
30%
1%
1%
2%
22%
6%
8%
33%
40%
30%
17%
18%
70%
60%
16%
2%
28%
1%
1%
10%
18%
21%
26%
24%
25%
2009
2010
2011
2012
2013
2014
Could not find a property to purchase
Loss of home country benefits
Cost/taxes/ insurance
Immigration laws
Financing issues
Other
Percentage of Respondents With
Clients
International Sales Tend to be Concentrated in
Real Estate Practices
Number of International Clients, Whether or Not Client Purchased a Property
(Percentage Distribution)
100%
95%
3%
4%
6%
6%
90%
85%
91%
91%
2009
2010
1 to 5
4%
5%
4%
4%
9%
8%
9%
8%
87%
88%
87%
88%
2012
11 or more
2013
2014
80%
2011
6 to 10
Percentage of Respondents With
Clients
Transactions Tend to be Concentrated in Specialists
28 Percent of REALTORS® Have More than 10 Percent of Their Business with
International Clients
Percent of Transactions with International Clients for REALTORS® with International Clients
(Percentage Distribution)
100%
17%
27%
22%
27%
54%
51%
52%
58%
54%
24%
22%
21%
16%
18%
2010
2011
2012
2013
2014
80%
60%
49%
40%
20%
34%
0%
2009
0%
1 to 10%
26%
more than 10%
28%
REALTORS® Have Both Resident and Non-Resident Clients
Types of International Clients
(Percentage Distribution)
100%
80%
60%
21%
23%
38%
33%
25%
37%
26%
30%
36%
34%
40%
20%
41%
44%
38%
38%
35%
0%
2010
2011
2012
2013
TypeA (Foreign Client)
TypeB (Recent Immigrant)
2014
Both Types
Steady Net Growth in Number of Clients
Change in International Clients: Past 5 Years
Percentage of Respondents With Clients
(Percentage Distribution )
100%
19%
90%
80%
9%
15%
10%
19%
17%
19%
9%
9%
7%
26%
6%
70%
60%
50%
57%
56%
53%
53%
40%
55%
48%
30%
20%
10%
15%
19%
19%
18%
21%
20%
2013
2014
0%
2009
Increased
2010
Stayed about the same
2011
Decreased
2012
Not applicable, have been in business less than 5 years
2014 Profile of International Home Buying Activity
Major Conclusions
•
International Sales a Niche Market.
– 7 Percent of total U.S. Home Sales by Dollar Volume.
– Slow Growth/Varies from Year to Year.
– Specialized Experience in Serving Buy-Side Important: Knowledge of language, customs,
culture necessary in serving clients.
•
A Concentrated Market.
– States: 55 percent of Transactions Concentrated in Florida, California, Texas, and Arizona.
– Countries: 54 percent of Transactions by Nationals from Canada China, India, Mexico, U.K.
•
International Buyers are Diverse.
– Motivations include investment, personal use (permanent or vacation), asset diversification.
•
International Buyers Need Assistance.
– U.S. real estate Practices Differ from Foreign Practices
– Cultural as Well as Day-to-Day Differences Between U.S. and Other Countries.
•
Sources of Clients
– Generally Through Referral.
– Websites Also a Source.