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California residential real estate drawing foreigners

The desire for U.S. real estate remains strong in other parts of the world. However, when it comes to residential real estate, international purchasers are transitioning from focusing on luxury properties to eyeing properties that are less pricey. This might be because of today's higher residential prices in California and other parts of the country, as well as the stronger U.S. dollar, both of which cost buyers from other countries more.

The world is currently experiencing relatively weak economic growth. In addition, financial market turbulence and devalued foreign currencies are presenting major challenges for international buyers. These challenges have resulted in a slowdown in nonresident foreign buyers' sales, but recent immigrant foreigners' purchases increased in the U.S. Thus, the total sales volume in dollars was recently the second highest since the year 2009.

Foreign real estate purchasers bought residential property valued at more than $102 billion in the U.S. from April of 2015 to March of 2016. The quantity of properties bought increase almost 3 percent to more than 214,000. The value of the homes that foreigners purchased was usually greater than all American homes' median price.

California is one of the five states that collectively account for 50 percent of purchases from foreign buyers, and it is second only to Florida. Many of the properties being purchased in the Golden State are Asian. With an applied understanding of the law, people in the state of California can take advantage of the current residential real estate climate and complete sales transactions in a manner that benefits them financially.

Source: cnbc.com, "Foreign buyers flood US real estate, but buy cheaper homes", Diana Olick, July 6, 2016

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