NAR released its annual report on international buyers today and the clear result is that working with buyers from outside the United States is becoming a key part of the real estate business and will only get more important. Not only are the numbers of clients for those who work with international buyers up, but the typical price of the homes they buy is quite a bit above the market as a whole. What’s more, international business is increasingly a nationwide business—that is, it’s becoming important in far more states than just the sun and sand states. To be sure, Florida, Arizona, and California continue to attract the most international buyers, but the trend lines are moving up for other states.
More from China, Canada. Click to enlarge
Last year, sales associates and brokers handled more than $82 billion in home sales to international buyers, up from $66 billion in 2010. That’s a 24 percent increase. No doubt the continuing favorable exchange rate is behind the increase, as is U.S. home prices, which remain low even though they’ve stabilized nationally and are even up in a few states. Importantly for your marketing efforts, be aware that buyers from Canada, Mexico, China, and the U.K. remain the biggest source of international business, but the mix is changing. Buyers from Canada and China are growing in leaps and bounds—in both cases, the number of buyers is more than double what it was in 2005—while buyers from Mexico and the U.K. are dropping, although they’re still relatively high.
That trend suggests marketing efforts to buyers from Canada and China are likely to be increasingly important. What areas are these buyers looking in? The report says Canadian buyers still like the sun and sand states, because they’re looking for warmer weather. It also says California continues to be a draw for buyers from Asia. European buyers still tend to look at homes in areas on the East Coast. Like business in general, most international business is generated through referrals—about 55 percent comes in that way—followed by online marketing, which accounts for 21 percent of business.
Cash rich. Click to enlarge
And that business is lucrative. International buyers bought homes that cost a median $252,000, compared to $165,000 for the market as a whole. What’s more, last year the median price for international buyers went up from the year before; for the market as a whole, it went down. And international buyers are far more likely to buy cash, eliminating the risk that the buyers can’t close on their financing. Last year, almost two-thirds of international buyers bought using cash, up from about a third in 2007.
The report says 27 percent of practitioners last year handled at least one international deal. It sounds like that number stands to only go up in the years ahead. The NAR report is called the “2012 Profile of International Home Buying Activity.” Learn more about international buyers at the global specialty section on REALTOR.org.
Big spenders. Click to enlarge
In the video above, NAR Chief of Quantitative Analysis Jed Smith talks about findings in the report on international sales.