Foreign buyers are purchasing significantly less American real estate than they used to. Homes bought by people from outside the U.S. from April 2018 through March 2019 tumbled 36% to below $78 billion dollars, according to a new data from the National Association of Realtors. Slowing global economic growth and tighter capital controls in China are partly to blame for the decline.
“When the foreign economies slow, there is less financial capacity to buy here in the U.S. Furthermore, the dollar has been quite strong over the past couple of years, so that may have deterred some people as the price of U.S. real estate becomes more expensive,” Lawrence Yun, NAR chief economist, told Yahoo Finance’s “The Ticker” this week.
For the seventh year straight, China surpassed other countries to purchase the most U.S. residential property, accounting for $13.4 billion worth of real estate purchases. But, that was a 56% drop from the previous 12 months. “They are limiting Chinese nationals from how much money they can take out of the country. And therefore, there is less financial capacity for Chinese to buy here in the U.S.,” said Yun.
But one real estate agent explains this could be a good buying opportunity. “Most sellers today are taking a loss, so buying is not as appealing to foreign buyers as it was in previous years. No one knows when a downward trend will start coming back up so many are just watching to see what happens. My feeling is that now is definitely a time to buy because current prices reflect fair market value and not inflated prices as we saw 6-12 months ago,” said Noemi Bitterman from Warburg Realty.
McKenzie Stratigopoulos is a producer at Yahoo Finance. Follow her on Twitter: @McKenzieBeehler