Though U.S. home sales to foreign buyers declined slightly in the year through March 2012, a preference for more expensive homes pushed the total sales volume of international sales up by 24 percent, according to an annual report from the National Association of Realtors.

NAR’s 2012 Profile of International Home Buying Activity includes results from 1,745 member respondents surveyed in April 2012. The survey covered purchases of U.S. residential real estate by international clients in the 12 months through March 2012. International clients were divided into two groups: foreign buyers with permanent residences outside the U.S., and buyers who are recent immigrants of less than two years or temporary visa holders residing in the U.S. for more than six months.

In the year through March 2012, each group accounted for an equal number of international sales, a total of 206,192, or 4.7 percent of overall home sales in that year. That total is down 2.2 percent from 2011, when international sales made up nearly 4.9 percent of overall sales.

At the same time, however, the average sales price of homes preferred by global buyers rose to $400,000, compared with $315,000 the year before. By contrast, the average sales price for home sales overall — both international and domestic buyers — declined 2.6 percent to $212,183 in the 2012 report.

That increase in the average price of foreign purchases resulted in a 24.2 percent rise in total sales dollar volume for international sales, to $82.5 billion, up from $66.4 billion in the year through March 2011. That $66.4 billion figure has been revised downward from the $82 billion originally reported last year as a result of adjusted home sales figures.

In December, NAR “rebenchmarked” its sales statistics going back to 2007, correcting assumptions that had led the trade group to overestimate home sales by 14 percent.

International sales figures for 2010 were also adjusted as a result. Sales volume for international sales in the year through March 2010 was $53.4 billion, NAR told Inman News. That means sales dollar volume in 2011 rose by about as much as in 2012: 24.3 percent.

“Today’s advantageous market conditions have drawn more and more foreign buyers to the U.S. in recent years, signaling how desirable and profitable owning property in this country can be,” said NAR President Moe Veissi in a statement.

“Low housing prices, a good inventory condition and increased buying power with today’s exchange rates help attract international clients.”

In the 2012 report, 27 percent of Realtors reported working with international clients, about the same as last year. Of those Realtors, nearly nine in 10 reported working with five or fewer international clients.

Four states accounted for 51 percent of international purchases in the U.S.: Florida (26 percent), California (11 percent), Arizona and Texas (7 percent each).

Source: NAR 2012 Profile of International Home Buying Activity.

At the local level, a recent Inman News report, “10 Hot Spots for Global Homebuyers,” highlighted the 10 most popular areas in the U.S. for foreign buyers based on public records between May 2011 and January 2012. Six were in Florida, and the remaining markets were in Arizona, New York, Hawaii and Nevada.

Five countries accounted for 55 percent of international transactions in the 2012 report: Canada (24 percent of international sales), China (11 percent), Mexico (8 percent), India and the United Kingdom (6 percent each).

Source: NAR 2012 Profile of International Home Buying Activity. 

“Proximity to the home country, the presence of relatives, friends and associates, the convenience of air transportation, and climate and location appear to be important considerations to prospective buyers,” the report said.

Just over half of respondents with international clients, 55 percent, reported their global buyers were referred from friends and previous clients as well as other foreign and domestic sources. About a fifth obtained their international clients via websites and online listings.

Fifty-one percent of international clients said the most important factor influencing their purchase was their view that U.S. real estate was a “profitable” or “secure” investment. Forty percent said “desirable location” influenced their purchase the most.

“Foreign buyers recognize that owning a home in the U.S. has many benefits, both financial and social,” Veissi said.

“Many purchase property as an investment, vacation home, or to diversify their portfolio. In addition, many recent immigrants view homeownership as an important accomplishment. They believe that being a homeowner is one of many ways they become established in the U.S. and attain stability, security and a sense of community.”

Just under half, 45 percent, of international buyers purchased homes for $250,000 or less. That’s down from 54 percent in 2011 and seems to indicate a trend toward higher price ranges. Percentage-wise, international sales of homes valued at more than $1 million jumped the most, to 10 percent, from 5 percent in 2011.

Source: NAR 2012 Profile of International Home Buying Activity. 

“The international client is typically wealthier than the domestic buyer and is looking for a property in a specialized niche, for example, a larger property suitable for multigenerational living, or a property that establishes the individual’s presence and standing in the community,” NAR said.

Nearly a third of Realtors with international clients reported those clients did not complete a sale. The reason cited by nearly half of respondents was the cost, taxes and insurance related to purchasing a U.S. property. Nearly four in 10 said their clients “could not find a house.” Obtaining financing was a problem in just over a quarter of cases. The majority of foreign buyers, 62 percent, paid in cash, unchanged from 2011.

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