U.S. Housing-Global

U.S. Housing, A Global Marketplace

 

The housing market is rapidly becoming an international marketplace with an increasing number of transactions representing global sales.
According to the National Association of Realtors®2014 Profile of International Home Buying Activity, for the period April 2013 through March 2014, total international sales are estimated at $92.2B, an increase from the previous period’s level of $68.2B.
Favorable exchange rates, affordable home prices and rising affluence abroad continue to drive international buyers to the U.S. to purchase properties and make real estate investments.
While international buyers are purchasing homes throughout the country, the four states accounting for 55% of the total reported purchases are – Florida (23%), California (14%), Arizona (6%), and Texas (12%). According to realtor.com®, the top five cities searched online by international buyers in 2014 were Los Angeles, Miami, Las Vegas, Orlando and New York City.
Twenty-eight percent of Realtors® reported working with international clients this year. International sales are becoming a specialty among real estate professionals.
– International buyers are more likely to make all-cash purchases when compared to domestic buyers. In 2014, nearly 60% of reported international transactions were all cash, compared to only 33% of domestic purchases.
– Most homes purchased by foreign buyers, about 42%, are used as a primary residence. Non-resident foreigners are limited to 6-month stays in the U.S., so these buyers largely use the property for vacation or rental purposes or as an investment.
– Approximately 65% of purchases involved a single-family home. Nearly half of international clients preferred properties in a suburban area, about a quarter preferred a central city or urban area, and about 13% choose to purchase in a resort area.
International buyers come from all over the globe, but Canada, China (The People’s Republic of China, Hong Kong and Taiwan), Mexico, India and the U.K. accounted for approximately 54% of all reported international transactions. China held the lead in dollar volume, purchasing an estimated $22B with an average sale cost of $590,826. China was also the fastest growing source of transactions, now accounting for 16% of all purchases, up 4% from last year. Mexico ranked third with 9% of sales and India and the U.K. both accounted for 5%.
Chinese buyers are now the biggest international players in the U.S. housing market and some states are seeing billions of dollars in real estate deals as a result.
California is particularly attractive because it’s so close to the homeland, and its major cities have large Chinese-American populations and attractive climates and lifestyles. The influx of Chinese buyers has helped push home prices higher in places like the Bay Area.
According to NAR, nearly 40% of the Chinese buyers will live in their U.S. homes full-time. But nearly half the purchases made by Chinese nationals are strictly for investment with buyers not intending to live in them at all.

Key Economic Reports Released This Week

RELEASE
DATE
ECONOMIC
INDICATORS
RELEASED
BY
CONSENSUS Wt. INFLUENCE ON
INTEREST RATES
Mon 07/28
10:00 am et
Pending Home Sales
for June ’14
National Association
of Realtors (NAR)

0.3%

**  If strong demand
 If weak demand
Mon 07/28
1:00 pm et
Weekly Bill Auction Dept. of the Treasury

N/A
offering

**  If strong demand
 If weak demand
Tue 07/29
9:00 am et
S&P / Case-Shiller HPI
for May ’14 y/y
S&P / Case-Shiller HPI

9.9%

**  If strong demand
 If weak demand
Tue 07/29
10:00 am et
Consumer Confidence
for July ’14
Conference Board

85.5%

**  If above consensus
 If below consensus
Wed 07/30
7:00 am et
MBA Mtg Apps Survey
for week ending 07/25
Mortgage Bankers Association of America

N/A

* Undetermined
Wed 07/30
8:15 am et
ADP Employment Report
for July ’14
Automated Data Proc &
Macromeconomic Adv

235k

**  If strong demand
 If weak demand
Wed 07/30
2:00 pm et
Gross Domestic Prod (GDP)
Q2 ‘134 advance
Bur. of Econ. Analysis
Dept. of Commerce

3.1%

****  If above consensus
 If below consensus
Wed 07/30
2:00 pm et
FOMC Statement
Fed Open Market Committee
Federal Reserve Board
Open Market Committee

No rate change
Neutral Bias

**** Determines Policy
Thu 0/31
8:30 am et
Jobless Claims
for week ending 07/26
Bur. of Labor Statistics
Department of Labor

305k

*  If above consensus
 If below consensus
Thu 0/31
8:30 am et
Employment Cost Index
for Q2 ’14
Bur. of Labor Statistics
Department of Labor

0.5%

****  If above consensus
 If below consensus
Thu 0/31
9:45 am et
Chicago PMI
for July ’14
Chicago Purchasing
Managers Association

63.0%

**  If above consensus
 If below consensus
Fri 08/01
TBA
Motor Vehicle Sales
for July ’14
Automobile Manufacturers

Vehiciles 16.7M

** Undetermined
Fri 08/01
8:30 am et
Employment Situation
for July ’14
Bur. of Labor Statistics
Department of Labor

Payrolls 228k
Unemp 6.1%

****  If above consensus
 If below consensus
Fri 08/01
8:30 am et
Personal Income & Outlays
for June ’14
Bur. of Econ. Analysis
Dept. of Commerce

Income 0.4%
Outlays 0.4%

***  If above consensus
 If below consensus
Fri 08/01
9:55 am et
Consumer Sentiment
for July ’14
Reuter’s/
University of Michigan

81.5%

*  If above consensus
 If below consensus
Fri 08/01
10:00 am et
ISM (NAPM) Index
for June ’14
National Association of Purchasing Mgt.

55.9%

**  If above consensus
 If below consensus
Fri 08/01
10:00 am et
Construction Spending
for June ‘ 14
Bureau of the Census
Dept. of Commerce

0.5%

**  If above consensus
 If below consensus
* Low Importance ** Moderate Importance *** Important **** Very Important

Reference Economic Focus Inc 

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