Global Business Council

NAR Releases 2021 International Transactions in U.S. Residential Real Estate Report

By: Carla Rayman Kidd, Realtor®, CIPS, Coldwell Banker Realty; 2016-2020 National Association of REALTORS®, Global Coordinator to North America, Central America, and the Caribbean;

International Instructor and Speaker

With the pandemic full-blown, I clearly expected a dismal report with respect to international buyer transactions. Our non-resident foreign buyers couldn’t travel, and most of them want to see a property before they purchase. To my surprise (and delight), while sales were down, the dollar volume of residential purchases in the United States during April 2020-May 2021 was $54.4 Billion. 107,000 sales were still completed, with the top foreign buyers coming from Canada, Mexico, China, India, and the United Kingdom. China still remained the largest foreign buyer in terms of the dollar volume of homes purchased. However, home purchases overall declined from the prior period for all the countries with the exception of the United Kingdom.

CASH BUYERS

The number of cash buyers remained the same as last year’s report at 39%. This number has been dwindling over the years due to the availability of financing and lower interest rates. Buyers from the United Kingdom were the most likely to pay all-cash, at 82%, followed by Canadian buyers, at 66%. Less than half of foreign buyers from China, Mexico, and India made an all-cash purchase, with the lowest share among Asian Indian buyers, at 8%.

HOME STYLE PREFERENCE

Like our domestic buyers over the past year, our foreign buyers prefer single-family homes over condominiums, with almost half of the purchases being in suburban areas. Chinese buyers had the highest share of buyers who purchased a property in the city, while Canadian and United Kingdom buyers had the highest fraction of buyers who purchased a property in a resort area. The share of buyers purchasing in a resort area has declined from its peak of 15% in 2009 to 7% in 2021 given the declining share of Canadian and United Kingdom buyers to total foreign buyers.

VACATION OR RENTAL PROPERTIES

The intended usage was mainly for vacation and / or rental investment. Canadian buyers were the most likely to purchase a home for vacation use, rental, or both, at 84%. Slightly more than half of United Kingdom buyers also purchased a property for use as a vacation home, a rental, or for both uses. Asian Indian buyers were the most likely to purchase a home for primary residence use, at 79%, followed by Mexican buyers, at 42%. Chinese buyers were the most likely to purchase a home for the use of a student, accounting for 13% of home purchases.

FOREIGN SELLERS

And, of course, there were foreign sellers. Canadians comprised the largest group of international clients who sold U.S. residential property during April 2020-March 2021, accounting for 21% of sellers. Chinese homeowners made up 8% of sellers, followed by Mexican homeowners at 6%. German and United Kingdom homeowners each accounted for 5% of international clients who sold U.S. property. Similar to foreign buyer trends, Florida was the top location for properties sold by foreign clients, accounting for 30% of properties sold by international clients. •