- Buyers from Canada, China, Mexico, and elsewhere are snapping up cheap housing in the most troubled markets, like Florida and California. Will foreigners save our housing market?
- ....while those in the U.S. question homeownership, foreigners in search of properties on the cheap have been all too eager to grab a slice of the American Dream. And to re-define it in a way that experts say could help stabilize housing markets in a few states with some of the nation's most troubled housing markets – namely, Florida and California.
- In the years following the real estate implosion, foreign purchases have been one of the few bright spots in an otherwise gloomy market. In the 12 months ending in March, international sales in the U.S. totaled $82 billion, up from $66 billion in 2010, according to the National Association of Realtors. Canada led the way, making up 23% of sales to foreigners, followed by China, Mexico, the U.K. and India. Argentina and Brazil combined reported a 5% increase in foreign sales, up 2% from last year.
- Admittedly, the trend isn't likely to turn the U.S. housing market around, since sales to international buyers still make up a small percentage of total sales. But for Florida and California, home purchases by wealthy foreigners and investors have proven significant. More than 40% of all international sales happen in the two states.
- In Florida, Cape Coral, Ft. Lauderdale, Miami, Naples, Fort Myers, Kissimmee (home of Disney World), Orlando and Jacksonville are some of the most popular U.S. cities among international house hunters, according to residential real estate website Trulia, which tracked international views of U.S. properties online. Roughly 20% of all residential sales across the state come from buyers abroad – the majority of which from Canada.
- It helps that home prices in Florida, with its high share of foreclosed homes, have fallen dramatically from their 2006 peak. What's more, a weaker U.S. dollar, especially against the Canadian dollar, has made snapping up properties in resort and suburban areas even more irresistible. But what it means to own a slice of the American Dream differs vastly for international homebuyers, who see their investments (paid for mostly in cash) as less of a place to raise a family and retire and more of a vacation home available for rent.
- California has also gained from foreign buyers. Home prices dropped by 59% between peaking in 2007 and bottoming in 2009. Unlike in Florida, the housing market across parts of the golden state has found a savior of sorts in the Chinese investors who have been gobbling up properties globally. This comes at a time when the costs of buying in China has risen as the country's government raises interest rates and tightens lending standards to help cool off the racing economy. Among the most popular California cities to foreigners: Los Angeles, San Francisco, Beverly Hills and San Diego.
- One community that has gained most is San Marino, which has largely been sheltered from the housing bust amid an influx of mostly Chinese house hunters snapping up properties in the relatively wealthy residential community. Last year, San Marino recorded its highest annual median home price ever – topping $1.5 million, up 1.6% from the previous year. To Mainland Chinese, the area is often associated with the rich and wealthy. So it's no surprise that the once predominantly white community in the 1990s has dramatically changed to be more than 50% Asian (primarily Chinese).
- The American Dream isn't dead -- it's just changing.
For those wondering, San Marino is northeast of LA - never heard of it until this story.
p.s. this comes on the day U.S. existing home sales (90%+) of the market, came in poor again. This has to be incredibly daunting for the bulls who come out each summer, as sales almost always surge (due to seasonal factors). They can't even get their 3 months of "the housing recovery is here" meme in. On a serious note, if existing home sales can't rise in these months when most people move and mortgage rates are so low, it truly is awe inspiringly bad. This is the 3rd decline in 4 months!! During the strongest part of the year for moving.
- Home sales fell 3.5 percent last month to a seasonally adjusted annual rate of 4.67 million homes, the National Association of Realtors said Thursday. That's far below the 6 million that economists say must be sold to sustain a healthy housing market.
- And this year's pace is lagging behind last year's total sales. The 4.91 million last year were the weakest sales figures in 13 years.
- The average rate on a 30-year fixed mortgage fell to 4.15 percent this week—the lowest level on records dating back to 1971.