Similar to how Chinese buyers are making Vancouver homes expensive, US real estate, especially on the high end, is also getting support from international buyers who find US houses attractively priced after considering the exchange rates in calculating their values.
In a report released by the National Association of Realtors (NAR) last Wednesday, May 18, 2011, foreign clients spent about $41 billion in US housing during the 12 months that ended in March 2011 and individuals with visas to stay for more than 6 months purchased an additional $41 billion, which if taken together, summed up to about 8 percent of the total US housing market.
Foreign buyers were discovered to be more likely to buy on the high end rather than the low end of the market. This was supported by the findings that the average purchase price paid by an international buyer was $315,000 compared to the overall U.S. average of $218,000.
The international buyers were also found out to likely to pay cash more, in part because of their difficulties faced in getting US-based financing. In fact, sixty-two percent of the foreign buyers entirely used cash in their payments and during the recent months, about one-third of existing-home sales were sold in pure cash.
The value of the dollar influenced the international sales. Almost 80 percent of the realtors reported that it did, according to NAR.
The report explained that when the dollar depreciates against the euro, it also tends to depreciate against other currencies, making the overall the US home buying market become more attractive to international purchasers.
The bargain is better viewed from the foreign buyers’ local currency. A European buyer will see a price drop of 8 percent, a Chinese house hunter an 8.6 percent discount and a Canadian buyer a 9.3 percent price chop.