International home-buying activity remains strong in California, C.A.R. survey finds
China, Canada, and Mexico were top countries of origin of international buyers
LOS ANGELES (Feb. 17) – Despite a slowing in the California housing market and appreciation of the U.S. dollar in 2014, international home-buying activity continued its momentum, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2014 International Home Buyers Survey.” The survey showed that one of six (14 percent) participating REALTORS® closed a transaction with an international client, unchanged from the previous year.
More than one in three international buyers (36 percent) were from China and their purchases remained very cash-strong. Two-thirds (66 percent) of international buyers paid all cash, down slightly from 69 percent in 2013. Those who purchased homes below $500,000 had the greatest tendency to pay all cash (66 percent), compared to those who purchased homes costing $500,000 to $1 million (57 percent).
Being more affluent than the average California home buyer, overseas buyers purchased more expensive homes at a median price of $490,000, compared to 2014’s single-family median home price of $447,000.
Those who purchased homes below $500,000 had the highest percentage of investment purchases (40 percent), compared to those who purchased homes between $500,000 and $1 million (17 percent for investment) or those who purchased homes over $1 million (34 percent for investment reasons).
Other findings from C.A.R.’s 2014 International Home Buyers Survey include:
• Thirty-six percent of international buyers in California were from China, 11 percent were from Canada, and 9.1 percent were from Mexico. The United Kingdom and India round out the top five countries of origin, with both under 5 percent.
• Nearly half of overseas buyers purchased a home in the suburbs. The percentage who purchased in a city center or urban area declined from 38 percent in 2013 to 33 percent in 2014, while purchases in small towns/rural areas increased from 9 percent to 10 percent over the same period.
• Of international buyers who obtained financing in the U.S., 85 percent said the source of their down payment came from their personal savings; 11 percent cited proceeds from a sale of a previous property; 7 percent received a gift; and 5 percent from the sale of personal assets, excluding real property.
• Two-thirds (67 percent) of international buyers bought single-family detached homes, and 23 percent purchased a condominium or townhome.
• International buyers in 2014 intend to keep their property for a median of 7 years, compared to 5 years in 2013.
• The percentage of first-time international buyers in the U.S. declined from 59 percent in 2013 to 54 percent in 2014.
• Three-fourths (75 percent) of overseas buyers said they only considered buying in the U.S., primarily to be closer to family and friends, for investment and tax reasons, or because of a child attending college in the U.S.
• Those who purchased homes over $1 million bought primarily for investment/tax advantages, because they have a business in the U.S., or because they have children in school here. Those who purchased homes under $1 million bought primarily to be closer to family and friends.
International Home Buyers Survey slides (click to open):
The International Home Buyers Survey was conducted via email to a random sample of California REALTORS® statewide who worked with international home buyers (one who is not a citizen or permanent resident of the U.S.). Eligible respondents all closed escrow on their homes within the 12 months prior to November 2014. Access the full report on the survey findings here: http://www.car.org/marketdata/surveys/other/ and view the webinar presentation here: http://www.car.org/marketdata/videos.
Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.