Foreign buyers boost us vacation-spot sales, housing market

As U.S. home prices continue to fall, foreign buyers are snapping up vacation homes and other investment properties[1]. In Florida, nearly a third of all home sales over the past year (ending in March) have been to foreign buyers, and Miami realtors are estimating about 40 percent of their buyers are from abroad. In fact, in Miami, 2011 might surpass 2005, the former “peak year” for house and condominium sales in the area. The National Association of Realtors (NAR) says that most of these buyers are still buying relatively close to home, with 23 percent of foreign buyers being from Canada. And lenders are catching on, making more and more loans to Canadians in particular (up 25 percent over last year).

And foreign investors are also actively participating in the commercial side of things as well. In fact, foreign investment this year is up 49 percent over 2009[2]. However, some analysts believe that foreign investments alone cannot truly help the U.S. economy or the real estate market recover, in part because the investments are not, thus far, high-return and because Americans are looking abroad for their own dollars rather than keeping them at home. As a result of this combination, foreign investment is not only failing to create the jobs that it has historically – in 2008 jobs created by foreign investments made by companies like Honda paid about 30 percent higher than the U.S. average – but the economy is also continuing to limp along as U.S. investors pull their dollars out of the national economy and put them elsewhere.

Source: RealEstate.BryanEllis.com