The latest numbers on overseas purchases of US homes have just been published, and to no one’s surprise, there were more Chinese buyers in 2012 than in 2011. However, despite the many headlines about Chinese devouring US real estate, acquisitions by buyers from China only increased one percent as a share of all international purchasers.
The 2013 Profile of International Home Buying Activity, which is published annually by the U.S’ National Association of Realtors (NAR) found that buyers from China were the second biggest foreign consumers of US housing after Canadians and accounted for 8 percent of all foreign purchases of US homes.
The survey by the NAR reported purchases from 68 different countries and treated “China” buyers as including citizens of mainland China, Taiwan and Hong Kong. This group of China buyers has ranked second Canada since 2011. Overall sales of US residential real estate decreased to $68.2 billion in the 12 months ending March 2013 from $82.5 billion during the prior 12 month period.
The top five countries together accounted for 53 percent of overseas purchase with Canada at 23 percent, China at 12 percent, Mexico at 8 percent, India at 5 percent and the UK also at 5 percent. China and Canada have been the fastest growing sources of international clients.
The purchases of US homes amounted to approximately 6.3 percent of the total U.S. existing home sales market of $1.08 trillion for the same period. Despite the drop in international sales, the total dollar value of these sales was still the second highest since 2007.
Where and What the Chinese Buy
For agents hoping to sell to buyers from China, California appears to be the place to be with 53 percent of home sales to Chinese happening in the golden state. According to data gathered through the NAR’s website, the five markets generating the most inquiries from potential Chinese buyers are Detroit; Los Angeles; Irvine, CA; Las Vegas; and Orlando, Florida.
Based on data from the survey, international clients from China purchased approximately an even mix of detached single – family and multifamily housing. The median price for homes purchased by Chinese buyers was $425,000 with about 69 percent of purchases reported as all-cash purchases.
Why Not Buy
Among potential foreign buyers of US real estate, overall cost, taxes, and insurance were cited by 36 percent of respondents to the NAR’s survey as the biggest deterrents to sales. In some cases potential foreign buyers do not understand the ongoing costs associated with a U.S. real estate purchase, costs which are sometimes very different from those incurred in other countries.
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