Canadians are playing a larger role in the U.S. housing market than in any year since 2007 and they outpace buyers from China and Mexico by far, according to a new survey of American real estate brokers.
The survey by the Washington-based National Association of Realtors (NAR) said foreigners snapped up $82.5-billion (U.S.) worth of houses in the 12-month period ending March 31. That compared with $66.4-billion a year earlier.
Canadians made up the largest share of purchasers, accounting for 24 per cent of all international sales. That compared with 23 per cent in 2011 and 11 per cent in 2007.
Chinese buyers made up the next largest segment at 11 per cent, followed by Mexicans at 8 per cent.
While sales to foreigners make up only about 10 per cent of all U.S. home sales, they are among the fastest-growing segments of the market. International sales climbed 24 per cent last year, according to the survey.
People from Canada and elsewhere are being lured by rock-bottom prices, a massive supply of foreclosed properties and record-low interest rates.
“Today’s advantageous market conditions have drawn more and more foreign buyers to the U.S. in recent years, signalling how desirable and profitable owning property in this country can be,” said NAR president Moe Veissi, who is also a real estate agent in Miami.
“I do a huge volume, all to Canadians,” said Diane Olson, a former Winnipegger who now sells real estate in the Phoenix area under United Brokers Group. She and other real estate agents make regular trips to Canada and speak at seminars on how to buy property in the United States.
“I just got back from speaking to probably 1,500 Canadians this last week and about 1,700 a couple of weeks ago,” Ms. Olson said. “And I’ll tell you it’s extremely powerful going up there and listening to these people and what they are looking to do.”
She added that about half of her Canadian customers are looking for a second home or vacation property while the other half are interested in investment purchases. Her typical customer is 51, she added.
Foreign buyers tend to pay in cash and buy more expensive properties, the NAR survey found. The median purchase price for an existing home sold to a foreigner was $252,000 last year, up from $200,000 in 2010.
In comparison, the median home price for all existing home sales in the United States was $165,000 last year, compared with $170,000 a year earlier.
“The average price paid by an international buyer was $400,000 compared to the overall U.S. average of $212,000,” the survey said. “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.”
Foreign buying is largely concentrated in Arizona, Florida, California and Texas. “Florida has been the fastest growing destination of choice, accounting for 26 per cent of foreign purchases,” the survey said.
The push by Canadians and others is being felt in many local markets. House prices in Phoenix, one of the markets hardest hit by the recession, have climbed about 25 per cent in the last year. Miami and Southern California are also seeing a strong rebound in prices and fewer foreclosures.