Home buyers in Southern California markets have been seeing more and more competition lately. We have seen several listings sell with multiple offers, which is not a rare occurrence in our market. However, 27 offers on a single property is a bit out of the norm for us!
Recent research from the California Association of Realtors (C.A.R.) has provided some insight into this interesting phenomenon. According to C.A.R. survey, “U.S. ranks as top destination for international home buyers, specifically the counties of Los Angeles, Orange, San Diego, Riverside, Contra Costa, and Santa Clara.”
Viewing the country as a safe place to put their money, international home buyers preferred purchasing properties in the United States over other countries, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2013 International Clients Survey.”
85 percent of international buyers said they only considered purchasing a home in the U.S., citing that the stable government and financial system would guarantee their home investment. International buyers also chose to purchase in the U.S. for its desirable location and climate (20%), to be closer to family and friends (20%), investment opportunities (9%), changes in work and employment (9%), educational opportunities (6%), and affordable prices (4%).
International buyers purchased a property in the U.S. primarily for investment purposes or tax advantages (18%) or to rent out (14%), contrary to traditional home buyers, who purchased primarily because they were tired of renting (23%).
Looking at California specifically, Los Angeles County was the top location where international buyers purchased properties (35%). International buyers also purchased homes in Orange (22%), San Diego (20%), Riverside (14%), Contra Costa (7%), and Santa Clara (7%) counties.
Additional findings from C.A.R.’s 2013 International Clients Survey include:
• Sixty-nine percent of international buyers paid all cash for their properties, compared to 27 percent of traditional buyers who paid all cash.
• Thirty-two percent of international buyers purchased the home as a primary residence, compared to 75 percent for traditional buyers, and 33 percent purchased the home as an investment or a rental property, compared to 19 percent of traditional buyers.
• While the primary language of many international buyers was Chinese (36%), 70 percent communicated in English, illustrating a highly educated international clientele.
• International buyers typically spent five weeks looking for properties, compared to 10 weeks for traditional buyers.
• Forty-four percent of international home buyers purchased homes with designer kitchens, 26 percent purchased homes with a wine cellar, and 9 percent purchased homes with a sauna. Other home amenities that international buyers wanted include private beach, putting green, heated floors, and outdoor kitchens.
The International Clients Survey was conducted via email to a random sample of REALTORS® statewide who worked with international home buyers. Eligible respondents all closed escrow on their homes within the 12 months prior to October 2013. Access the full report on the survey findings here: http://www.car.org/marketdata/surveys/other/ and view the webinar presentation here: http://www.car.org/marketdata/videos.
According to the Wall Street Journal, these are 10 countries racing to buy American Homes:
- United Arab Emirates (UAE) – 352.2% (Growth in prospective homebuyers from 2009)
- Switzerland – 269.7%
- Hong Kong and China – 254.2%
- France – 190.0%
- Italy – 178.4%
- United Kingdom – 153.8%
- Australia – 121.9%
- Canada – 107.7%
- Sweden – 100.0%
- Germany – 95.2%