International Buyers Paying Cash For Homes

As a result of the global economic recession and tightening credit crunch, more international buyers are paying all cash for local US property. For the 12-month period ending in May 2009, an estimated 154,000 homes were sold to foreign nationals, down from 170,000 during the previous 12 months. Nearly half paid cash - bypassing the mortgage process.

The median price for a home paid by foreign buyers for the year ending in May 2009 was $247,100 – higher than the overall national price of $198,100 in 2008. A significant number, 45.8 percent of foreign buyers, paid cash, in part because obtaining a mortgage was more difficult than in prior years. The total dollar volume was $38.7 billion.

U.S. laws do not restrict or scrutinize most property purchases by foreign nationals. There are few barriers to owning property here, unlike transactions in many other countries, although immigration laws prohibit foreigners from remaining in the U.S. continuously for more than six months without a special visa. In addition, international investors are afforded the same property rights as those enjoyed by U.S. citizens. The top five countries of origin for foreign buyers were Canada, with 17.6 percent of buyers; the United Kingdom, 10.5 percent; Mexico, 9.8 percent; India, 8.5 percent; and China, 5.4 percent. The percentage of buyers from Canada, the U.K. and China declined from the previous study, while purchasers from Mexico and India increased.

23% of those purchases were in Florida. The prime purpose for purchasing a property in the U.S. is to use it for a vacation home, cited by 33.9 percent of respondents; for both investment and vacations, 23.5 percent; as a residential rental property for investment, 18.3 percent; and commercial property for investment, 3.5 percent.*

*The 2009 NAR Profile of International Home Buying Activity is based on responses from 3,785 Realtors and describes international home buying activity in the U.S. over the 12-month period from the end of May 2008 to May 2009.

There is a great deal of information available for international homebuyers on our website at www.floridagulfproperty.com You can search our Featured Listings or ALL MLS right from the site. There is also a helpful newsletter on Buying a Vacation Home As a Rental Income Property.