Increasing Prices On The US Housing Market Contribute To The Decrease In Foreign Interest
The US housing market recovery is being driven by foreign investors from all over the world who are drawn mostly by the attractive price declines and the fact that the real estate market has proven to be one of the safest investment options for people who are based in countries with relatively unstable markets.
However, the recent trend seems to be shifting gears now as Trulia has noted a drop of almost 10 percent in the number of searches being conducted by foreigners in the previous year.
In the second quarter of 2012, a total of 4.1 percent of all home searches were made by foreigners which is lower than the 4.5 percent garnered in the second quarter of 2011.
Overall, the interested in real estate has grown significantly; however, foreigners are now turning out to be a smaller percentage of today’s growing numbers.
Reasons for the Decline
It seems that there are two logical reasons behind the decline in foreigner interest. The first reason is the increasing prices on the US housing market which essentially makes them reconsider their motives. The second reason would be that the interest has fallen off from countries included in the Eurozone crisis.
Most Attractive US Areas
Over the last couple of months, the three most attractive areas for foreigners are Los Angeles, New York, and Miami which have been receiving the highest number of searches.
Los Angeles seems to be the dominant option for people from Russia and Japan. New York holds the top spot for Chinese and Italian buyers. Miami, on the other hand, has been receiving the most interest from wealthy buyers from Brazil.
It helps to note that these three areas seem to share certain qualities which include the idyllic weather conditions during the latter part of the year as well as the big discounts which have been available within those areas during the housing bust.
But the weather conditions have proven to be insufficient reason for foreign investors to push through with their intended purchases now that the prices for real estate have stopped going down in the last few months. In fact, the asking prices have increased by as much as 0.3 percent across the nation.
At the end of the day, it seems crystal clear that the very reason that foreigners have been so enthusiastic about the US housing market is the same reason that they are now less inclined to consider making purchases. As prices used to provide them with great bargain deals, it seems that the increasing prices have made them reconsider what would have been amazing opportunities.
Nevertheless, there are many foreign investors who remain committed to their real estate goals since there remain to be many other factors that prove to be beneficial. If you would like to learn more about the current market situation, or if you would like to find out about available options within the country, you may contact our team of real estate experts for more information.