California Association of Realtors Study: Foreign Buyers Driving Calif. Market!

CAR’s newly released 2014 International Home Buyers Survey,showed despite a slowing in the California housing market in 2014, international home-buying activity continued its momentum.

The survey showed of the “international home-buyers” (hence referred to as “IBs”):

36% were from China and their purchases remained very cash-strong.

66% of IBs paid all cash , down slightly from 69% in 2013.

Those who purchased homes below $500,000 had the greatest tendency to pay all cash (66%), compared to those who purchased homes costing $500,000 to $1 million (57%).

Being more affluent than the average California home buyer, overseas buyers purchased more expensive homes at a median price of $490,000, compared to 2014’s single-family median home price of $447,000.

Those who purchased homes below $500,000 had the highest percentage of investment purchases (40%), compared to those who purchased homes between $500,000 and $1 million (17% for investment) or those who purchased homes over $1 million (34% for investment reasons).

Other findings from C.A.R.’s 2014 International Home Buyers Survey:

36% buyers are from China

11% from Canada

9.1% Mexico

The United Kingdom and India round out the top five countries of origin, with both under 5% .

Nearly half of overseas buyers purchased a home in the suburbs.

The percentage who purchased in a city center or urban area declined from 38% in 2013 to 33% in 2014, while purchases in small towns/rural areas increased from 9% to 10% over the same period.

Of IBs who obtained financing in the U.S.:

85% said the source of their down payment came from their personal savings

11% cited proceeds from a sale of a previous property

7% received a gift; and 5% from the sale of personal assets, excluding real property

67% of IBs bought single-family detached homes, and 23% purchased a condominium or townhome.

IBs in 2014 intend to keep their property for a median of 7 years, compared to 5 years in 2013.

The percentage of first-time IBs in the U.S. declined from 59% in 2013 to 54% in 2014.

75% of overseas buyers said they purchased in the U.S., primarily to be closer to family/friends, for investment and tax reasons, or because of a child attending college in the U.S.