During March, April and May 2016, international for-sale and rental home searches made up 3.5% of nationwide Trulia search traffic. The number of international searches increased 14% over the same period a year earlier. However, since in-country searches have been increasing much faster than international searches, the overall share of international home searchers is declining.
Of the for-sale homes searched for by internationals, the median price is $346,300 as of May 2016, up from $340,100 in May 2015.
Nationwide, most foreign home searchers hail from:
- the United Kingdom (UK);
- Australia; and
China used to make up a more significant share of international home searchers, but their presence has lessened following their 2015 stock crash. Still, of the Chinese investors still searching, California attracts a large share, likely due to the relatively high share of Chinese immigrants already in the state.
Of California’s major destinations, international homebuyers and renters are searching:
- in Los Angeles, from Canada and the UK;
- in Orange County, from China;
- in San Diego, from Mexico and Japan;
- in San Francisco, from the UK and Germany; and
- in San Jose, from Taiwan and Vietnam.
These potential foreign homebuyers and renters are a significant resource for California’s housing market. In fact, our state nets over 100,000 migrants each year from other nations, while experiencing a net loss of residents to other states, according to the U.S. Census.
International homebuyer forecast
Going forward, the expectation for future international real estate investment is mixed.
On one hand, the U.S. economy is strong compared to its global contemporaries. With China yet to rebound from its stock crash and the UK and Eurozone in financial flux due to the Brexit, the U.S. remains a safe haven for foreign investors.
On the other hand, the U.S. dollar is strong — seemingly a good thing, but it actually makes it more difficult for foreign investors to invest without settling for a smaller initial investment than allowed in their own currency, trading security for lower profits. Therefore, the price of homes international homebuyers are searching for will likely decline this summer, remaining lower until the global economy recovers.
As a side effect from this global economic action, high demand from foreign investors is actually helping to keep mortgage interest rates low for now. Low interest rates continue to prop up high home prices in California, good for domestic sellers and their agents, bad for international buyers.