International buyers are all the buzz in today’s real estate environment. A day doesn’t go by when some trade journal, TV show, and news report doesn’t talk about the all the money being spent by international buyers in the United States. With all the buzz, one has to ask the question, “What are the chances that your home is going to be sold to an international buyer?
The quick answer is not good. The National Association of Realtors does some really good research. Their publication “Profile of International Home Buying Activity” gives a good analysis of international home buying activity. (See the full report here).
According to the report international sales represent about 6.3% of the total real estate market in terms of dollar volume, a whopping $68.2 Billion. Just under half of that volume is attributed to recent immigrants and people living in the U.S. for professional and/or educational proposes. Just over half are people with a primary residence outside the U.S. and are buying in the U.S. for investment and/or vacation type homes. When most sellers think of a foreign buyer I would suggest they are thinking of the latter.
So when a seller suggests that their property is perfect for an international buyer they are talking about 3.2% of the market. Is this starting to sound like the preverbal needle in a haystack? Maybe…Maybe Not.
The reality of International buyers greatly depends on geography. 61% of international buying activity in terms of volume is done in 5 States, Florida, California, Arizona, Texas, and New York.
Where these international buyers come from might also surprise people. As is consistent with most of the U.S. international economic activity our neighbors to the North are our best real estate trading partner. Canadians account for almost 25% of all international buyers, nearly double the next closest country of origin, China.
Since we know that most of the buying activity is occurring in 5 States and nearly a quarter of the buyers are from Canada it makes sense to know what these people are buying.
The typical international buyer isn’t purchasing the multi million-dollar estate that is often portrayed on TV. The typical international buyer is looking to buy a single family detached house in a resort/vacation area that is priced at less than $500,000. While 77% are priced under $500K mark 54% are priced at or below $250K
Maybe if that is your property you can not only find the needle in the haystack but also thread the needle. To learn more about how my company markets to international buyers sign up for my newsletter.