That’s the amount sales pulled back by non-resident foreign buyers in this year’s 2016 Profile of International Activity in U.S. Residential Real Estate report, which surveyed Realtors® about their transactions with international clients between April 2015 and March 2016.
Combined, non-resident and resident foreign sales dollar volume was only down 1.3 percent compared to last year’s survey to $102.6 billion. However, you can thank resident foreign buyers (think: non-U.S. citizens who are recent immigrants and temporary visa holders) for upping their purchases by roughly $10 billion.
According to Lawrence Yun, NAR chief economist, “Both the increase in U.S. home prices – up 6 percent in March 2016 compared to one year ago – and the depreciating value of foreign currencies against the U.S. dollar made buying property a lot pricier last year.”
In addition to weaker global economies and persistent volatility in the financial markets, foreign buyers simply had to fork over much more over the past year. Led by Venezuela (45 percent) and Brazil (24 percent), at least eight countries, including China and Canada, saw double-digit percent increases in the median sales price of a U.S. existing-home when measured in their country’s currency.
For instance, imagine if you were a Venezuelan this past March interested in buying a $221,500 (the median resale purchase price in March) for a vacation home in South Florida. If you were paying in your native country’s currency, in this case the bolivar, the purchase price of your vacation home would now cost a whopping 45 percent more in U.S. dollars to $321,175.
Would you still buy it? This year’s survey shows that a growing share of non-resident foreigners shied away. The chart below says it all.