The Continued Power of Foreign Buyers in the Domestic Market
It has been a long, slow road to recovery for the real estate market, but there appears to be more good news. As home prices have been steadily rising in most markets across the country, more people are starting to buy and sell on their terms again. However, this trend is not merely domestic. All signs indicate that foreign buyers are still a large part of the recovery effort.
In recent years, foreign buyers have snapped up a great deal of devalued property, taking advantage of the weakened market. Since home prices are rising, there are fewer opportunities for foreign buyers to do this. Because of this, foreign buyers have decreased in number but are still incredibly active in many compelling areas across the country. Cities like San Diego, Las Vegas and Miami all attract significant interest from foreign buyers. In fact, according to the National Association of Realtors, up to 6 percent of all home sales in the previous year were from foreign buyers. This constitutes about 68 billion dollars of income.
Most foreign buyers are looking for luxury homes, which serve as second or third residences. While interest in key American cities is elicited from all parts of the world, many buyers are from China or Canada. In general, American housing has been regarded as a viable option thanks to the range of choices and the compelling financing options.
However, while foreign investors remain important to the overall stability of the market, there are more signs of balance thanks to continued housing recovery. As more homes are selling at market value, competition has tipped in favor of local buyers. More than that, foreign investors are seeing more regulations in place to limit their financing options. Some areas have imposed stipulations that do not allow foreign buyers to rent out property in order to maintain balance in the market.
While this shift has made it more difficult for foreign investors, the good news is that they are still interested in lucrative domestic markets. For sellers, this shift means that there is more competition, which will only increase the odds of getting a good offer on their home. The right balance of foreign investors and domestic buyers is the ideal atmosphere to stimulate continued recovery in San Diego and other areas throughout the country.