Foreign homeownership in U.S. increases.

Despite the current housing slowdown, international homebuyers continued to account for a significant share of housing transactions in the United States, with one in five Realtors[R] reporting they had sold a home to an international client within the past year, according to a report by the Chicago-based National Association of Realtors (NAR).

The 2007 NAR Profile of International Home Buying Activity noted that nearly one-third of the Realtors surveyed worked with international clients or prospects during the previous year. Realtors who actually closed sales of homes to international clients reported an average of 1.9 clients, representing 15 percent of their annual business.

"While U.S. housing markets are no longer performing at record-breaking levels, U.S. real estate is still considered a prime investment opportunity for foreign buyers and a 'safe haven' in which to put their money," the report stated. "Whether they use their U.S. home as rental/investment property, as a vacation home or both, non-U.S. residents account for a significant share of home-buying activity. It is likely they will continue to do so."

In 2006, NAR noted that most international homebuyers purchased single-family homes or townhomes, and like most domestic homebuyers, they financed their purchase.

However, they showed stronger preferences for condos/apartments when compared with U.S. homebuyers--22 percent of international buyers purchased condos/apartments, versus 12 percent of U.S. buyers. In addition, 28 percent of foreign buyers bought their houses with cash, compared with 8 percent of U.S. buyers.

The median sales price of homes purchased by international buyers was $299,500, which is significantly higher than the U.S. median of $221,900 during the same period, said NAR.

Forty-seven percent of all international buyers purchased homes exclusively for vacation, while 22 percent were motivated primarily by investment. Nearly one-third of foreign buyers cited both vacation and investment as reasons for their purchase. International homeowners spent an average of 4.2 months of the year in their U.S. property in 2006, noted the report.

One-third of all international buyers are from Europe, but buyers from Asia and North America (outside the United States) each represented about one-fourth of the total market, according to NAR.

Sixteen percent of all international buyers are from Latin America. By individual country, most buyers come from Mexico (13 percent), the United Kingdom (12 percent) and Canada (11 percent), said NAR.

"Another factor drives international participation in U.S. residential real estate markets. The U.S. market contains a large supply of real estate," noted the report. "It is also fairly easy to purchase a home in this country; the U.S. does not restrict or scrutinize most property purchases by foreigners, as happens in other countries. There are few barriers to owning a property [in the United States]."

Foreign buyers purchase homes across the United States, but 52 percent of sales in 2006 were concentrated in three states--Florida (26 percent), California (16 percent) and Texas (10 percent). The South attracted nearly half or 49 percent of international buyers in 2006, while 31 percent purchased homes in the West, said NAR.

Most Realtors reported a rise in sales to international buyers, as 25 percent of Realtors said they had increasing business compared with five years ago, while 67 percent reported about the same level of international business and only 8 percent noted a decrease.

One-third of Realtors surveyed said they believe that foreign retirees will represent an increasingly important market for Realtors based in the United States, said NAR.