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International Home Buyers Have Impact on U.S. and Local Economy

While all of the real estate in Denver is local, it is always important to keep in mind that property buyers are not necessarily from the area. As a global marketplace, the actions of global buyers have a direct and lasting impact on our local economy and real estate market. Therefore, it is important to keep an eye on international home buying activity and how it impacts the state of Colorado as well as the Denver area.

According to a recent REALTOR® report, the total sales volume to international clients from March 2011 to March 2012 was an estimated $82.5 billon. These figures represent a significant leap when compared to the period that spanned from March 2010 to March 2011, during which time the total sales volume to international clients was an estimated $66.4 billion. To further illustrate the impact that international buyers have on the U.S. economy, 27 percent of Realtors report working with international clients at some point from March 2011 to March 2012. Interestingly, these buyers come from nearly every country around the world. Nonetheless, 55 percent of international buyers come from the following five countries: Canada, The People’s Republic of China, Mexico, India and the United Kingdom.

While Colorado is not among the most popular states among international buyers, the Rocky Mountain state still sees its share of international buyers. According to the report, there are several factors that influence where international buyers choose to purchase their real estate in the U.S. These include:

• Proximity to their home country
• Whether or not they have associates, friends or relatives living in the area
• The convenience of air transportation
• Climate

With proximity to the home country carrying the most weight for most buyers, the East Coast tends to attract more Europeans, while the West Coast is more attractive to Asian buyers. Florida attracts South Americans, Europeans and Canadians. As such, 51 percent of international buyers make purchases in Arizona, California, Florida and Texas.

The REALTOR® report also found that international buyers typically fall into one of two different categories. The first category of buyers is comprised of those who maintain a permanent residence outside of the United States. For these buyers, the U.S. real estate serves as an investment property, a vacation home or a place where they visit for less than six months out of the year. The other category consists of immigrants who came to the country less than two years ago or temporary visa holders who have been in the United States for more than six months. Altogether, the international buyers within these two categories accounted for 4.8 percent of the total sales in the United States, with the purchases being divided evenly between the two groups.

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