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Foreign buyers may start descending on the U.S. home market once more after spending much of the COVID-19 pandemic on the sidelines.
Real estate sources who have their fingers on the pulse of the international-buyer space told The Wall Street Journal that they’re starting to see clients from outside the U.S. show more serious interest in their markets in the early weeks of 2023.
National data sources typically don’t list where buyers come from, making it difficult for the Journal to confirm this is a nationwide trend. But time and time again, real estate sources who work with foreign clients told the paper the same story.
Corcoran Sunshine, a new-development firm that sells condos in New York, told the Journal that a strong uptick in buyers from China and the Middle East drove a 25 percent year-over-year rise in foreign visitors to their properties in January.
And with more domestic buyers sitting on the sidelines due to higher mortgage rates and price uncertainty, some real estate teams are seeing foreign clients become an increasingly large share of their business.
John Gomes of Douglas Elliman told the newspaper that his team’s business now comprises 40 percent international buyers — up from 30 percent before the pandemic.
“It was the domestic buyer that led the recovery out of Covid,” Gomes told the Journal. “It is the foreign buyer that is leading the recovery this time around. It’s very, very apparent.”
Even as domestic home demand began to bounce back from the economic shockwaves of the early pandemic, interest from foreign buyers in U.S. homes was low throughout most of the pandemic as foreign governments grappled with when to lift travel restrictions amid the spread of the virus.
Purchase volume by international buyers shrank to $54 billion between April 2020 and March 2021, the lowest dating back to 2009. Over the following 12 months that ticked back up to $59 billion, the second lowest volume recorded since 2009.
But firms in some markets have been regaining lost momentum with international buyers in recent months, and fast.
From April through December of 2022, there were three times as many foreign visitors to Corcoran Sunshine’s portfolio properties as there were during the same period of 2020.
It’s a big turnaround for a segment of home demand that at one point felt very uncertain, Corcoran Senior Vice President of Research and Analytics Ryan Schleis told the newspaper. China has only recently relaxed some of its COVID-19 travel restrictions, for example.
“It was a real unknown when and if, after the pandemic, the Chinese buyer would come back to New York,” he said.
A Compass agent in Los Angeles told the paper that Chinese buyers are swooping in at “unprecedented” levels, largely in the higher-price-point segments of the market.
At least one major example of this made headlines recently when Mark Wahlberg reportedly sold his $55 million Beverly Park property to an undisclosed buyer with ties to Hong Kong and mainland China.