The international buyers have shown great interest in acreage, commercial property offerings and family sized houses as investment opportunities. This is due to the low prices on foreclosed homes in the repressed housing market. Why oh why are they now receding into the distance?
One leading economist claims it was a passing fancy on their part. Like a group of disinterested lovers, the international buyers are scouting greener pastures. According to Forbes, the foreign searches on Trulia dropped by ten percent in 2012.
Home listing site, Trulia is finding an increase in all categories of searches. But, the percentage of international buyers who are doing the searches has decreased. It seems their interest wanes with every improvement in the United States real estate market.
As the desperate situation in the United States disappears, so do the international buyers in equivalent proportions. The marriage is over and they are starting divorce proceedings. Another usually reliable source of information says the opposite is true. Those international buyers with their intriguing foreign accents and their freely flowing currency are still hanging around.
Read the figures and make your own judgment. In the twelve months ending in March, international buyers spent $82.5 billion on United States real estate. That was reportedly a 24 percent increase in the sales compared to the previous year. The total during the previous year was $66.4 billion.
Buyers from abroad want two things. First, they want to benefit from the rock bottom prices. Secondly, their cash will be safer in American real estate investments than other venues. As we know, there are both financial and political situations ongoing in some countries. Russia comes to mind.
The safety of the United States real estate as an investment opportunity will still have appeal after the prices rise somewhat. It is more beneficial to have a slightly lower amount of money invested securely than to have a slightly higher amount invested in a slightly less safe place. The risk is too great in many locations overseas at this time.
The New York housing market is a magnet to international buyers in spite of it being expensive to get into. Will the appeal lessen as conditions in the real estate industry rebound? It remains to be seen.