This past year has seen a sharp increase in foreign real estate purchases. International buyers accounted for $82.5 billion, or 8.9%, of the $928 billion spent on residential real estate in the 12-month period that ended in March (National Assoc of Realtors) which is up 24% from the previous year.
With a weakened US dollar, coupled with inventory and low real estate prices, many foreign investors are taking this opportunity to invest largely in US real estate. Though the current Euro-crisis has weakened the previous advantage the exchange rate offered, it hasn’t stopped the demand with the exchange rate giving added leverage to international buyers. Adding into the frenzy is the continued rental market demand, allowing investors to rent out their properties with higher returns.
The survey reported that 62% of international buyers paid in cash, although this number may increase as fewer financing options become available.
Although popular destinations such as Manhattan, Miami, parts of California and Texas have benefitted from international buyers, Class A and B areas throughout Chicago are in continued demand. Mixed use and multi-units are still heavily sought after. Attached housing, especially those favored by transportation and location continue to be sought after as well, but with many condo associations becoming non-warrantable, many of these purchases require higher down payments or an all cash purchase.