Texas was still one of the most popular destinations for international home buyers prior to the Covid outbreak. NAR’s latest report for International Transactions in U.S. Residential Real Estate through March 2020 shows that Florida, California and Texas still command the most dollar volume and number of transactions for foreign investment in residential real estate. The most common foreign buyers in Texas included Mexico, India and Brazil heading up the list of countries showing the largest percentage of Texas property purchases through the latest one year period.

The total number of transactions and dollar volume of international purchases in the U.S. continued the recent decline. Foreign residents purchased $74 billion in U.S. property through March 2020, down from $77.9 billion the previous year.  154,000 existing homes were purchased in the U.S. by foreign buyers, down 16% from 183,100 last year. The foreign buyer median purchase price was $314,600, significantly higher than $274,600 for all U.S. existing homes, and up $34,000 from the median price of foreign buyer purchases a year ago. The average price of $480,870 was 12.8 percent higher (more than $54,000) than the previous average for foreign buyers. Even though the volume of purchases has declined, foreign residents are still willing to pay top dollar to park their money in U.S. residential real estate.

It is worth noting that only half of foreign purchases of residential U.S. real estate are for primary residence purposes. Vacation homes, investment and other uses continue to be at least half of the intended use of U.S. homes being purchased by foreign residents, and that’s assuming you believe the 50 percent total for “primary residence” is really accurate. (hint: I highly doubt it). In terms of the reasons foreign buyers mentioned as why they decided not to purchase, cost and a lack of inventory were the two most common reasons cited. No surprises there.

The recent decline of Chinese investment in U.S. residential real estate continued in 2020. With the latest figures Canada is roughly tied with China in terms of the total transaction volume, with each country accounting for 12 percent of total foreign property buys. Mexico accounted for 9 percent of purchases and India was fourth with 6 percent of transaction volume.

The numbers for the 2020/2021 period will likely show declining foreign purchases in the age of Covid. Most countries are still grappling with opening up their economies, and air travel is a still at a tiny fraction of previous volumes. Escalating tensions between the U.S. and China could likely curtail foreign investment from China even further, so 2021 could see Canada reemerge as the top purchaser of U.S. residential real estate in both transactions and dollar volume. China overtook Canada in 2013 with the dollar volume of U.S. purchases, and Chinese investment has been the biggest source of foreign buyer money for the last 7 years running. Something tells me the clock may be going Tik Tok on that streak.