The real estate market has cooled off, even for foreign investors. Levi Kushnir, the president of Stable Holdings, located in Valley Stream, attributed the dropoff of purchases from overseas buyers to the low number of available residential investment properties on the market and the higher home sales prices.
According to the National Association of REALTORS® report, 2023 International Transactions in U.S. Residential Real Estate, only 84,600 existing home sales in the U.S. came from foreign buyers between April 2022 and March 2023 — the lowest number ever. That is down 16.5% from last year, when 98,600 existing home purchases were made by international buyers, and 236.3% off from a recent high of 284,500 foreign buyers in 2017.
The top five countries with the highest share of U.S. existing homes, according to the report, are China at 13%, followed by Mexico (11%), Canada (10%) and India (7%). Colombia, the United Kingdom and Australia were tied for fifth at 3% each. Last year, Canada led the U.S. existing home market at 11%, followed by Mexico (8%), China (6%), India (5%) and Colombia (3%).
Further, between April 2022 and March 2023, buyers outside the U.S. collectively paid an all-time low of $53.3 billion, the report stated. Last year’s figure of $59 billion was 10.7% higher than this year, and the most recent peak of $153 billion in 2017 was an increase of an astonishing 180.2%.
Mr. Kushnir notes that fewer homebuyers outside the U.S. are paying in cash, explaining the dropoff of foreign money in the U.S. existing home market. “Right now, the foreign investors aren’t putting money into the existing home market because the potential sellers have nowhere to go,” he says. “That’s because interest rates went up and everything became so expensive. When interest rates were low and houses were cheaper, foreign money was flowing into the U.S. real estate investment market like water. Now, interest rates have gone up and housing prices have skyrocketed.”
The paucity of available inventory on the market right now has also impacted the international investors’ buying decisions. “Because of a lack of inventory, foreign buyers are having a hard time looking for any decent deals,” Mr. Kushnir says.