u.s. residential purchases by international buyers: june 2010
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U.S. Residential Purchases byInternational Buyersy
June 2010
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Total U.S. Residential Transactions Were $907 Billion, Twelve Months Ending in First Quarter 2010.Months Ending in First Quarter 2010.
International Purchases Were 4 Percent.
U.S. Residential Market: $907 Billion
Foreign Purchasers4.45%
Domestic Purchasers95.44%
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Twenty Eight Percent of Realtors® Reported Having at Least One International Client in 2010.
Eighteen Percent with Transaction Completed.
Realtors: Foreign Client Percentages
32%
28%30%
35%
26%
23%
18%
13% 12%
18%
15%
20%
25%
13% 12%
0%
5%
10%
15%
0%
2007 2008 2009 2010
Realtors who had international clients Realtors who sold homes to international clientsRealtors who had international clients Realtors who sold homes to international clients
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Previous Clients and Friends Provided 53 Percent of the Initial Contacts for Realtors® Serving the International g
Market.
Initial Client Contact
Domestic source13%
International source3%
Previous contacts/
Web13%
Previous contacts/ clients34%
Walk in Office/ Open house9%
Ad/ Yard signs
Other31%
Friends19%
Ad/ Yard signs8%
All Others1%
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International Market Appears to be Relatively Concentrated: the Number of Realtors® with a Large Number of International Clients is g
Limited.
11 or moreRealtors With International Clients ‐‐Number of Clients
129%
57%
6 to 106%
11 or more4%
29%
49%
2
317%
28%
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Two Percent of Realtors® Obtaining 75 to 100 Percent of their Transactions from International Clients. Three Percent Obtaining 51‐g
75 Percent.
Percentage of Transactions by Realtors with International Clients
43%
40%
45%
50%
24%25%
30%
35%
11%15%
20%
25%
6% 5% 6%
3% 2%
0%
5%
10%
0% (N ) 1% 5% 6% 10% 11% 15% 16% 25% 26% 50% 51% 75% 76% 100%0% (None) 1% to 5% 6% to 10% 11% to 15% 16% to 25% 26% to 50% 51% to 75% 76% to 100%
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Five Percent of Realtors® had Six or More Clients.
Percent of Realtors by Number of Clients Purchasing Property
6 to 1011 or more
2%
Z
3%2%
Zero34%2 to 5
30%
1 only31%31%
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The International Client: Type A, Type B, and Both Served by R lt ®Realtors®.
International Client Types Served by Realtors
21%
41%
38%
Type A: Primary residing in another country
Type B: Recent immigrants and short term visa holders
BothBoth
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Why Clients Do Not Purchase.Thirty Four Percent Had Financing Problems.
Why Clients Did Not Purchase—in Addition to the 34 percent
35%Not find a property
Encountering Financing Problems
9%
13%
19%
Exposure to U.S. tax laws
Immigration laws
Cost of property
3%
4%
7%
Insurance costs
Loss of home country benefits
Property taxes
18%
3%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Other
Insurance costs
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International Purchasers: Diversity of Areas and C t iCountries.
Purchases by Client Regions or Origin
Africa4%
Oceania1%
4%
Asia28%
North America35%
Europe26%
Latin America
6%
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International Purchasers: Diversity of Areas and C t iCountries.
Purchases by Client Nationality‐‐2010
23%
20%
25%
15%
10%9%
8%7%
5%
10%
%
3%2%
0%
5%
C d M i U i d Ki d Chi /H K G /F I di R i A i /B ilCanada Mexico United Kingdom China/Hong Kong Germany/France India Russia Argentina/Brazil
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Canada‐‐Largest Buyer Group in the Past Three Years. Share of Mexican Buyers is Growing. Share of U.K. buyers has been y g y
Decreasing.
International Purchasers: Country of Origin
25%
30%
15%
20%
2007
2008
5%
10%2008
2009
2010
0%
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International Purchases—Pricing.International Purchases Pricing.
Purchase by Price Range
3%
7%
$750 K to $1 Million
Over $1 Million
11%
9%
6%
3%
$300 K to $400 K
$400 K to $500 K
$500 K to $750 K
$750 K to $1 Million
11%
10%
8%
$150 K to $200 K
$200 K to $250 K
$250 K to $300 K
18%
17%
0% 2%
$100 K or less
$100 K to $150 K
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Pricing Over Time.Pricing Over Time.
Percent of International Sales by Price
45%
50%
30%
35%
40%
45%
2007
2008
10%
15%
20%
25% 2008
2009
2010
0%
5%
Under $200K $200K to $500K $500K to $1 Million Over $1 Million
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Types of Properties Purchased.Types of Properties Purchased.
Type of Property Purchased
Commercial Property3%
Detached single‐
Condo/ Apartment23%
3%
family66%
Townhouse/ row house8%
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MortgagesInternational Purchasers Frequently Pay Cash.
Property PaymentDon't know
1%
All cash (no mortgage financing)
With mortgage financing44%
55%
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International Buyers are Split Between Use of the Property as a Vacation Home/Investment Home and p y /
as a Primary Residence.Intended Use
Vacation home for family and friends
22%22%
P i id
Residential rental property for
Primary residence50%
property for investment
14%
Both of the above14%
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Price AnalysisPrice Analysis
Price distribution by residence purpose
8%11%Over $750 K
9%
25%
6%
11%
6%
14%
6%
$200 K to $250 K
$250 K to $300 K
$300 K to $500 K
$500 K to $750 K
14%
14%
14%
11%
23%
20%
9%
11%
$100 K or less
$100 K to $150 K
$150 K to $200 K
$200 K to $250 K
0% 5% 10% 15% 20% 25% 30%
Non‐primary residence Median: $186,100Primary residence Median:$240,000Primary residence Median:$240,000
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International Buyers Purchase Property in a Variety of Types of AreasVariety of Types of Areas.
Location Characteristics
Resort area14%
Central city/ urban area27%
Small town/ rural area9%
Suburban area50%
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Transactions by State.Transactions by State.
Percent of Transactions by State
25%
30%
15%
20%
2007
2008
10%
15% 2008
2009
2010
0%
5%
Fl id C lif i A i T G i N Y k N dFlorida California Arizona Texas Georgia New York Nevada
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Realtors® Have Been Reporting Modest Increases in I t ti l Cli tInternational Clients.
How Has Percent of International Clients Changed?
70%
40%
50%
60%
10%
20%
30%
0%
Increased Stayed about the same Decreased Not applicable
Last Year Last 5 Years
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The Value of the Dollar Appears to Impact I i l S lInternational Sales.
Effect of Change in Value of Dollar on International Sales
Not much21%
Very significant38%
Moderate41%
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The Value of the Dollar Appears to Impact I t ti l S lInternational Sales.
U.S. Median Home Price: Dollars and Euros
Price in $200
250
U.S. ed a o e ce: o a s a d u os
100
150
ce in
1,000
Price in €
0
50
100
Pric
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
1,000 Euros 155.1 171.5 174.9 157.3 156.3 175.7 177.5 159.9 132.7 122.5 140.71 000 Dollars 143 6 153 1 165 0 178 8 195 4 219 6 221 9 219 0 198 1 172 5 173 1
0
1,000 Dollars 143.6 153.1 165.0 178.8 195.4 219.6 221.9 219.0 198.1 172.5 173.1
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Security and Profitability: Prominently Mentioned as Reasons for PurchasingReasons for Purchasing.
Most Important Issue for Clients
A secure investment.
Other8%
18%
Profitable investment.
29%
Desirable location.45%