Foreign Buyers and Their Impact on Luxury Real Estate
By: Ismael Rodriguez
The foreign buyer is no stranger to luxury real estate in coastal cities like Miami, for example, and their impact on this particular market is nothing short of influential.
Zillow’s 2017 quarterly Home Price Expectations Survey, which recorded answers from more than 100 housing experts and economists about the impact of international buyers on the U.S. real estate market, showed that foreign buyers essentially have monopolized the high-end market because of their major impact on home values.
The National Association of Realtors also released similar results, documenting that foreign U.S. homebuyers purchased a whopping $102.6 billion of residential property between early 2015 and 2016. Of course, these properties—214,885 residential properties— are mostly on the high-end side of the market.
Another pattern recorded by the National Association of Realtors revolved around the foreign buyers preferred location, which showed a flocking preference toward Florida (22 percent), California (15 percent), Texas (10 percent), Arizona (4 percent), and New York (4 percent).
In South Florida, for example, these buyers mostly originate from Venezuela, Argentina, Brazil, Colombia and Canada, which accounted for 64 percent of foreign sales in South Florida last year, according to the Miami Association of Realtors.
Their purchases total $6.2 billion on residential properties alone, propelling South Florida into a year-over-year increase in international purchases of residential properties, a $100 million difference from 2015.