The landscape of American property ownership is becoming more international, according to the National Association of Realtors (NAR). NAR data shows a significant increase in the number of foreigners purchasing American homes, with Canadians, Chinese and Mexican home purchasers now comprising the top three international investors in U.S. real estate.
Overall, home purchases by foreign investors have increased 24 percent since 2011, with Canadians leading the pack, claiming $16 billion of the estimated $82 billion in total annual sales — or 24 percent of the foreign homebuyer market. Chinese consumers made up 11 percent of the property transactions, spending $9 billion in home purchases between March of 2011 and 2012, and Mexican investors round out the top three, spending $6.5 billion a year on U.S. homes.
The NAR cites several primary reasons for the trend, including social status, investment safety, the lure of desirable vacation homes, and the increased income opportunity of using prime real estate investments as rental units.
Specific immigrant groups also are tending to cluster in different areas of the country. A majority of the Canadian dollars are being invested in warm climate Florida cities such as Miami and Fort Lauderdale. Chinese consumers are buying homes in West Coast cities such as Los Angeles and San Francisco, while Mexican consumers settle in smaller dwellings in Texas cities such as San Antonio and Laredo.
Differences in language and legal systems can present challenges for U.S. Notaries and others handling these transactions as well as travel or immigration matters. But real estate spikes of this nature also can translate into extra income opportunities, depending on the long-term goals of their new foreign clientele.
Michael Lewis is Managing Editor at the National Notary Association.