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International Buyers: A Significant Part of Real Estate Sales

NAR has estimated residential sales to foreign buyers at $ 82.5Billion for the 12 months ended March 2012, approximately 8.8 percent of the total residential market by dollar volume (http://www.realtor.org/reports/profilse-of-international-home-buying-activity).  Data for estimated commercial real estate sales to foreigners are more limited.  Real Capital Analytics provides information for transactions greater than $2.5 million.  RCA has reported the total market for larger U.S. commercial property sales over 2001-2012 at approximately $2.8 Trillion, with purchases by foreign buyers in the neighborhood of $212 Billion, or 7.7 percent of total sales.

Thirteen cities accounted for 81 percent of total foreign purchases of commercial real estate in the U.S.

Although commercial real estate sales to foreign buyers are relatively concentrated in the 13 markets, foreign investors have actually made purchases in a large number of cities, as indicated on the map.

Click chart to view larger version.

An interesting question is the choice by international buyers of U.S. cities for investment.

  • Some locations apparently have gained their prominence over relatively long periods of time as well known port cities or key economic centers of substantial size—e.g., Atlanta, Boston, Chicago, Los Angeles, New York, San Francisco, and Seattle.
  • Other locations appear to be relatively high growth areas—e.g., Austin, Dallas, Houston, Miami, San Diego, and Washington, D.C.

Jed Smith, Managing Director, Quantitative Research

Jed Smith is Managing Director, Quantitative Research with the National Association of Realtors®. He has worked on real estate issues for the past 20 years, providing input on a variety of housing, commercial real estate, tax, and planning issues. Recently he has been involved in several international studies.

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