During the first year of the Covid-19 pandemic, the US saw a major increase in domestic real estate transactions. International buyers took the opposite approach and avoided investing in any US properties while the pandemic continued due to the uncertainty of the world’s economy.
Sales of US homes to foreign buyers fell by about 31% from April 2020 to March 2021, according to the National Association of Realtors.
International buyers purchased around 107,000 properties during that time, which marks the lowest unit volume and lowest dollar volume since 2011, according to NAR.
“The big decline in foreign purchases of homes in the U.S. in the past year is no surprise, given the pandemic-induced lockdowns and international travel restrictions.”
“Yet, even with the absence of foreign buyers, the U.S. housing market strengthened solidly,” said Lawrence Yun, NAR’s chief economist.
China, Canada, India, Mexico, and the United Kingdom are typically the top five countries continuously investing in US property. The amount of money brought in this past year, however, was down by at least 50% for buyers from China, Canada, and Mexico. The UK was the only nation that actually saw an increase in investment this year.
Normally, China takes the lead in terms of the most amount of US property purchased throughout a given year, however, those transactions decreased significantly during the Trump administration. Now, China buyers have been inquiring more and more.
“There has been quite a positive impact on the demand from the Biden boost, as the U.S. is being perceived as much more predictable now, and visas are also much easier to be obtained.”
Georg Chmiel, executive chairman of Juwai IQI, a home listing site in China claimed that “on the other side, and now that we are over a year dealing with the Covid pandemic, it has lessened the impact on the buying decisions because flights to the U.S. are possible.”
Home prices are now 15% higher than they were pre-pandemic in the US; which makes sense considering the economic impact the nation has been enduring. Chimel stated that these rising prices, however, create a new demand for international buyers who may be afraid that they’re missing out on prime investment opportunities.”
Additionally, homes in the US are much less expensive than homes in places like London or Hong Kong, where a lot of buyers inquire about US property. The number of virtual tours on almost all major real estate sites in the US have increased exponentially.
“So if that’s an indication of the comfort, then certainly this has increased, because people are now used to do far more things online shopping, education, also working from home online, and that also had an impact on the property market,” said Chmiel.
“As travel restrictions loosen and foreign students return to U.S. colleges in the upcoming year, there is likely to be some growth in foreign buying of U.S. real estate. High home prices and the ongoing lack of inventory could, however, pose a challenge for buyers,” Yun said.
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at firstname.lastname@example.org.