Staying on top of the latest real estate trends is important. In a recent report on international activity in U.S. residential real estate, a new trend seems to be surrounding Canadians snapping up a record number of properties in the United States at record prices. What’s going on?
The 2017 Profile of International Activity in U.S. Residential Real Estate report, released by the American National Association of Realtors, indicated foreign investment in American housing is at an all-new high, mainly because of a substantial increase in sales dollar volume from Canadian buyers.
The U.S. is seeing a large rise in out-of-country buyers according to the report, which also shows exponential growth in both the volume of foreign buyer transactions and the average price paid.
There are two foreign buyer types, resident and non-resident. Resident buyers have immigrated to the U.S., or have a long-term visa. Non-resident buyers use the home on occasion, maybe legitimately so. Yet, more often, they are just property speculators. According to the NAR’s report, most foreign buyers that come from China, India, and Mexico were resident buyers. Buyers from Canada and the United Kingdom were primarily non-residents.
With Canada’s housing prices remaining steady, the main reason for this trend in Canadian real estate seems to be that Canadian buyers want cheaper, more affordable housing to invest in – investments that some Canadian buyers can’t find at home. The NAR report notes that Canadians saw a rapid rise in domestic prices versus the rise in prices in the U.S. which could explain the attraction for Canadian buyers.
Between April 2015 and March 2016, foreign buyers picked up more than $100 billion in residential property – that’s almost 215,000 residential purchases in the United States. Another interesting fact from the report is that houses purchased by foreign buyers were generally priced higher than the median value of all U.S. homes. Chinese buyers purchased nearly 30 billion dollars’ worth of property. Canadians came in second with a record $19 billion worth of U.S. property purchased.
However, of all the foreign buyers, Canadians are the least likely to actually take up residency according to the report. Most are purchasing for a vacation home or property investment, with only a third planning to make the move. Another theory is that, after selling homes in markets such as Toronto and Vancouver, Canadian buyers find themselves with an abundance of capital, and with the more affordable options in the U.S., buyers can do more with that capital. A number of those are retirees moving to some of the top retiree states – Florida, Arizona, and Texas.
To learn more about this real estate trend, you can read NAR’s report here: https://www.nar.realtor/
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