International Real Estate Investors Choose U.S. Properties According To Tom Tsilionis

Top Quote Tom Tsilionis TSI GROUP research shows popularity of U.S. real estate among foreign buyers End Quote
  • (1888PressRelease) March 17, 2009 - The weakening U.S. dollar and declining home values are largely discouraging for American homeowners. For international real estate investors, however, such conditions present opportunity. Foreclosure Specialist and Trainer, Thomas Tsilionis recently released the 2009 TSI REPORT to 85,000 members of The Association of Commercial Real Estate Professionals (ACREPRO). The TSI Report is generated March 1 and September 1 each year and includes a section that relates to International Home Buying Activity.

    "TSI estimates that between 150,000 and 190,000 homes were sold to foreign nationals from February 2008 and February 2009 ," according to the TSI press release on the findings. "Recent foreign buyers purchased properties in every state and the District of Columbia. The most popular states where international buyers purchased homes are Florida, California and Texas. Arizona, New York, Washington and Nevada were also popular."

    Nearly half of the properties purchased by foreign buyers were located in the South; 25.4 percent of all property sales to foreign buyers occurred in Florida alone. (For more information on foreign investment in Florida's real estate market, please see our previous article, Florida is the new Europe.)

    More than 25 percent of the estimated 150,000 to 190,000 sales to foreign buyers were in Florida "Foreign exchange rates have helped make U.S. homes more affordable for international buyers," according to TSI's press release. "The euro, for example, has strengthened 24 percent versus the U.S. dollar over the past two years. Home prices are also now more affordable in places such as Florida and Arizona, contributing to those states’ popularity among foreign buyers."

    The typical foreign buyer bought a single-family home at $297,400, intended for use as a vacation home, where the buyer stayed 2.6 months of the year, according to the findings. 40 percent of foreign buyers made the purchase in cash, compared to just 7 percent of domestic homebuyers who do so. In the previous report, which covered the period between April 2006 and April 2008, 28 percent of foreign buyers made their purchases in cash. This 12 percent increase in foreign buyers who purchased properties in cash can perhaps be attributed to the weakened U.S. dollar and sinking home prices across the country.

    Foreigners who invest in U.S. real estate also differ from their domestic counterparts in other ways. They tend to buy more expensive properties than domestic real estate investors, and are more likely to purchase a condo or townhome than domestic real estate investors. Foreign buyers purchase properties that cost an average of 36 percent more than domestic buyers, and 14 percent of properties purchased by foreigners cost $750,000 or more, according to the findings.

    Investors from China were the most likely to purchase properties at $1 million and more, with 14 percent of Chinese buyers doing so. The median price paid by real estate investors from China was $450,000, the highest median of any location in the report.

    Nearly one quarter of investors from India purchased properties to use as rentals, the highest found in the report.

    "People from North America, Europe and Asia accounted for more than 85 percent of recent foreign home buying transactions. The top six countries of origin for foreign home buyers, in rank order, were Canada, the United Kingdom, Mexico, China, India and Germany," according to TSI's press release. "This year, Canada replaced Mexico as the country with the largest share of foreign buyers in the U.S. The percentage of Canadian buyers doubled from last year, from 11 percent to 23.5 percent."

    26 percent of Realtors have worked with foreign homebuyers, according to Inman News; that is down slightly from the 32 percent of respondents in TSI's previous report, which covered the period between April 2006 and April 2008. The drop February be attributed in part to decreased confidence in the U.S. real estate market in the wake of its downturn.

    The research included in the study covers the period between February 2008 and February 2009 and was based on responses from about 4,000 Realtors who work with international real estate investors. Such foreign buyers were defined as those who aren't classified as foreign-born residents of the U.S., and who principally reside out of the U.S.

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