The volume of real-estate purchases from international buyers dropped to the lowest level in a decade over the last year as a result of the COVID-19 pandemic.
The countrywide hot housing market exists despite a massive reduction in foreign investment over the course of the pandemic. Loosened travel restrictions may reignite foreign interest in U.S. real estate — pushing home prices even higher in certain markets in the process.
“There was a 31% decrease in the number of homes bought by foreign investors over the course of the COVID-19 pandemic.” The ‘psychological issue’ facing international investors Even before lockdowns and social distancing began in the U.S., real-estate agents were reporting a downturn in interest from foreign buyers. As international travel quickly became challenging amid the pandemic’s onset, buyers were less inclined to spend their money on American real estate.
But even with this week’s announced relaxing of travel restrictions, it could be some time before foreign investment truly recovers. Part of the problem lies in the vaccine requirements: If the U.S. requires international visitors to have been treated with FDA-approved vaccines, it could preclude a great deal of travel from countries that have invested in other vaccines such as China and Russia.
For the past 13 years, Florida has represented the top destination for foreign buyers, representing 21% of international purchases. In 2021, California came in second at 16%, followed by Texas and Arizona , with New Jersey and New York close behind at 4%.“The travel ban likely contributed to an easing of demand from foreign buyers of U.S. real estate, but that didn’t do much to slow the rapid rebound in the U.S. housing market in the second half of 2020 and so far in 2021,” Blomquist said.
Will the Evergrande crisis propel foreign investment in the U.S.? Another overseas issue, but one not related to foreign travel: Chinese property-giant Evergrande 3333, -0.44% has attracted a significant amount of attention over the past week after it hired financial advisers as analysts have raised concerns about a possible default.
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