Unprecedented Surge: Foreign Buyers Snap Up U.S. Real Estate

Unprecedented Surge: Foreign Buyers Snap Up U.S. Real Estate

RECBL - Real Estate News

Foreign investments in U.S. real estate have surged nearly 50 percent as of late, according to the 2017 Profile of International Activity in U.S. Residential Real Estate from the National Association of REALTORS(R) (NAR).​

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The report shows that between April 2016 and March 2017, foreign buyers and recent immigrants purchased over $150 billion in residential property-$153 billion, to be exact. Marking a new survey high, this boost is a 49 percent increase from last year’s $102.6 billion rank.

"In the face of global economic and political uncertainty-that is, Venezuela upheaval, Brexit, Syrian refugees, Russia meddling, and even the very nasty U.S. Presidential election campaigning-people with money were searching for something very safe," says Lawrence Yun, NAR chief economist and senior vice president of Research. "As a consequence, both the demand for U.S. Treasury bonds and U.S. real estate rose."

While the report shows an influx of buyers from the top five countries...
Learn More> International Real Estate Investors

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Home Equity Major Retirement Asset for Most

Home Equity Major Retirement Asset for Most

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One of the most significant advantages of owning a home is the ability to build wealth-and according to a recent report from the Employee Benefit Research Institute (EBRI), home equity is one of the top two assets households rely on in retirement, barring pension or Social Security benefits.

The report, "Importance of Individual Account Retirement Plans and Home Equity in Family Total Wealth," compared assets in households headed by those between the ages of 25 and 64, computing the share of assets comprised of home equity and retirement plans (e.g., 401(k), IRA)-the other key source of income in retirement.

The median share was 78.2 percent, and even higher when focused in on the 55-64 age range: 87.4 percent.  "The data show that it is overwhelmingly the case that individual account (IA) retirement plan assets, plus home equity, represent almost all of what families have to use for retirement expenses outside of Social Security and traditional pensions," said Craig Copeland, author of the report and senior research associate at EBRI, in a release.

Markedly, the presence of an IA can be an indicator of a households assets overall. More than three-quarters (79.6 percent) of households without an IA have less than $10,000 in assets, according to the report, suggesting some link between having an IA and owning a home.

"Those families without IA assets typically have very low overall assets, so they have almost nothing to draw from for retirement expenses (outside of Social Security)," Copeland said.

Source: Employee Benefit Research Institute (EBRI)

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International Homebuyers Have More Impact on High-End Market

International Homebuyers Have More Impact on High-End Market

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​International homebuyers have more impact on the high-end housing market than on the general housing market, according to the latest Zillow Home Price Expectations Survey for the second quarter of 2017, which surveyed over 100 housing authorities.

Those surveyed reported that though international buyers have a major effect on home values in the luxury market, they have only a minor effect on supply and values overall.

"International buyers are popular scapegoats for rising real estate prices and shrinking inventory, but domestic factors have had a bigger influence on the housing market, much more so than demand from overseas," says Dr. Svenja Gudell, chief economist at Zillow. "Older millennials are reaching prime home-buying age, increasing demand for housing, but we are still well behind historical norms when it comes to building new homes. The fact that economists and experts are revising their expectations upward for future home value growth is a sign that these trends will continue to exert upward pressure on prices going forward."

The majority of those surveyed foresaw international buying activity to either remain at its current pace or slow in the year ahead. Many agreed, also, that recent steps taken by several cities to cap international home-buying will be ineffective at preserving affordability.

Those surveyed, in addition, amended their previous home price forecast, now believing prices will post 4.8 percent growth in 2017-up from 3.4 percent one year ago.

"On the heels of last year’s nearly 7 percent national home value appreciation rate, the prospect that prices will increase less than 5 percent overall this year might be dispiriting to some," says Terry Loebs, founder of Pulsenomics, conductor of the survey. "Yet, 4.8 percent is not only well above the historical average annual gain; it's the most optimistic projection for 2017 that we've seen from our expert panel over the past five years."

For more information, please visit www.zillow.com.

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