HOUSTON – (By Dale King, Realty News Report) – A strong dollar may be good for American workers and the nation in general, but it has apparently cooled foreigners’ fervor for buying homes in the United States, says the chairman of the 130,000-member Texas Realtors.
“It was the total volume that dropped,” said Tray Bates of Texas Realtors. “As the dollar strengthens, it dissuades international buyers from purchasing in the US. They look for cheaper options.”
He said the financially muscular buck isn’t the only factor in the mix, but it is an important consideration for folks overseas and north and south of the border to acquire a home, particularly bargain-hunters.
Bates’ comments to Realty News Report followed the recent release of the Texas International Homebuyers Report by Texas Realtors. It says buyers from outside the United States – particularly neighbors in Canada and Mexico — signed closing papers on $7.8 billion worth of houses in the Lone Star State between April 2018 and March 2019.
The total pales a bit when compared to the $10.89 billion worth of homes purchased during the year before, says the Texas Realtors’ report for the period from April 2017 to March 2018.
Overall, the US saw a 31% decrease in the number of foreign buyer purchases compared to the last reporting period.
Florida still tops the chart of foreign home buys nationally. In fact, about one of every three people (31%) from outside the 50 states buys in the Sunshine State. California is second, but far behind at 12%.
Texas ranked third at 10% in the nation for homes sold to international buyers, with 18,310 residential sales out of 183,100 nationwide.
With its large and diverse population, Houston tops the list of Texas metros that draw immigrants, the report says. The Bayou City welcomed 38,686 people to its shores, ranking Number 5 in the nation. They mainly settled in Houston, The Woodlands and Sugar Land.
Ranking Number 8 was Dallas/Fort Worth/Arlington with 34,620 immigrants; Number 25, Austin/Round Rock/San Marcos with 7,908; Number 29, San Antonio/Braunfels with 6,274 and Number 36, El Paso, welcoming 4,397 to its border-side community.
“Houston has one of the most, in not themost, diverse populations,” said Bates. “If you are an internet buyer, you can look at the top metros and ask yourself, ‘Do I have a community here? Will I make a mark here?’”
“The strong economy is one of a number of good reasons to look at Houston,” he added.
Texas was particularly popular with buyers from Mexico and India. Of all homebuyers from Mexico, 28% purchased a home in Texas. The next closest state, California, had 10% of the total homebuyers from Mexico. Among buyers from India, 13% chose Texas—just behind first-place Florida, with 14%.
On the commercial side of real estate, Texas is the third-most popular destination for buyers who work with the statewide Realtor association, according to the 2019 Commercial Real Estate International Business Trends report from the National Association of Realtors. Dallas was the fifth-most popular U.S. market for commercial real estate purchased by international buyers with a dollar volume of $2.9 billion, and Houston was ninth at $2.2 billion.
Even with a drop-off this year in overseas sales of American homes, Bates said: “Texas is seen as a solid state for investments due to our strong economy, business environment and large metropolitan areas. Investors are interested in residential and commercial real estate in Texas where they can deploy their resources to make an attractive return. Specifically, we’re seeing international investors look to Texas for large-scale investments in subdivisions and master planned communities.”
Early in 2019, delegates from Texas Realtors traveled to the leading international real estate development conference, Le marché international des professionnels de l’immobilier (MIPIM), in Cannes, France to meet with international real estate investors and showcase Texas’ attractive investment climate.
“One of the key learnings we brought home from MIPIM was the increasingly diversified interest in both residential and commercial real estate in Texas,” said Hanne Sagalowsky, a Realtor from Dallas and the National Association of Realtors Coordinator to Western Europe, Israel and Turkey.
“With this increased foreign interest, we want international homebuyers eyeing Texas to know that Realtors can help them navigate common issues such as taxes and currency conversion to successfully complete their real estate transaction.”
In the end, Bates noted, “The world continues to see Texas as a strong environment for international real estate investment opportunities.”
To view the current Texas International Homebuyers Report in its entirety, visit texasrealestate.com.