The recent National Association of Realtors (NAR) report indicating a decline in foreign real estate purchases in the U.S. might seem like a cause for concern. But at Waltz, we see this as a golden ticket. Think Willy Wonka, but instead of chocolate, it's prime U.S. real estate.
Even though the number of foreign buyers purchasing U.S. homes dropped by 36%, there's more to the story, and unfortunately, the report doesn't give us the full picture. Important details like how few homes are for sale, the slow pace of building new homes, and the effect of low interest rates on the market are missing. We need this information to truly understand what's happening in the world of international real estate.
Despite these missing pieces, the 2024 Profile of International Transactions in U.S. Residential Real Estate offers many valuable insights. Let’s look at what the key takeaways reveal about the state of our industry, who’s buying, and who’s not.
While the market might be taking a breather, international buyers are still as keen as ever to snag a piece of the American Dream. The number of real estate agents who worked with international clients remained stable at 15% from April 2023 to March 2024. It seems the lure of property ownership in the Land of the Free is as strong as ever.
American homes remain relatively affordable compared to properties in other desirable parts of the world. Despite the strong dollar and economic uncertainties, the U.S. housing market is still a pretty sweet deal. Plus, the fact that foreign investors didn't sell more properties this year indicates they still see U.S. real estate as a valuable investment.
Foreign buyers face several hurdles that often lead them to decide against purchasing U.S. property. With 17% unable to secure a mortgage and another 11% pulling their hair out over currency conversions, these financial challenges are significant. Combined with high prices and a limited inventory, investing in U.S. real estate becomes increasingly difficult.
While half of foreign buyers can afford to pay for their properties in cash, the other half are forced to opt out or watch from the sidelines, missing out on real-life Monopoly money. If these issues were addressed, it’s possible we might see fewer foreign investors opting out of the market.
Foreign buyers aren’t messing around when it comes to American real estate. According to the NAR report, the median purchase price for foreign buyers is significantly higher than the average home sold in the U.S. ($475,000 vs. $392,600). Plus, 18% of them are dropping a cool million or more on their American dream home. Even while the economy fluctuates, foreign investors still really like buying expensive homes in the U.S., and real estate agents and sellers can make a lot of money by catering to them.
The NAR report indicates a decline in international real estate purchases but also reveals a whole lot of untapped potential. However, the report lacks the crucial data needed to fully understand international investing, like information on major real estate liquidations, new construction trends, and the impact of low-interest loans.
Despite these shortcomings, the NAR report certainly shows that foreign buyers remain interested in American real estate, even while financial and logistical hurdles as tall as the Empire State Building try to keep them away.
Enter Waltz, the digital equivalent of a knight in shining armor. We offer a robust platform that simplifies the entire process of investing in U.S. real estate and mortgage options to help you leverage your money wisely. Plus, we can quickly and safely transfer your money from your country to the U.S. We handle all the financial details, so you don't have to worry about a thing.
Ditch the spreadsheets and the stress, and let Waltz handle the heavy lifting. After all, you deserve to enjoy the American dream without the American nightmare of paperwork. Get started now.
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