A new bipartisan bill presented by Senators Charles Schumer (Dem., NY) and Mike Lee (Rep., UT) recommends giving foreigners the opportunity to buy a home in the USA for more than $500,000 with the assurance of a residence visa.
International buyers love the USA. Consider the number of applications handled by the USCIS on a daily basis and you’ll get a fraction of how many people want to live the ‘American Dream’. Furthermore, it’s just a great time to invest. Americans themselves are taking advantage of the low mortgage rates and home prices.
In 2010, foreigners invested over $16 billion in US home buying – 4.56% had permanent residences outside the US. Recent immigrant and temporary visa holders invested $41 billion over the past two years. In 2009, 55% of foreign homebuyers paid cash due to the absence of credit checks internationally. NAR stated that foreign homebuyers have bought into 7.7% of the nation’s 1.7 trillion market of existing homes.
Who Are They?
The numbers show us that the largest investors were Canadians, with the remaining split among Chinese, Mexicans, British and Indians (South Asians).
I feel we have an active market and it’s about to get very busy if this bill is passed. At a minimum investment of $500,000, the luxury market will definitely stand to benefit. For buyers looking at investment, an attractive perk to the bill allows the $500,000 to be divided to buy several homes – this will allow investors to rent out their additional properties.
Reading through all the information connected with the proposed bill shows me that there are a lot of kinks that will need to be worked out for foreign investors to really come on board with the concept. There are several restrictions involved such as the visa will be tied in to the property and will lapse if the investor sells the property, the visa doesn’t automatically allow the investor to work – they will have to go through an application process for permission, and so on… but it has got the real estate market thinking in a whole new light. What IF we were to market to International buyers?
Arizona, California, Florida and Texas saw results where 58% of all US residential transactions were by international buyers and most States have seen at least one international transaction. Realtor.com has taken this approach seriously and has recently launched their international portal. We, as Illinois Realtors, need to think beyond our borders and embrace this viable open market.
What’s your opinion? Do you think this bill should be passed?
Do you believe that it will help the real estate industry?
Are you actively marketing to international buyers?
Feel free to your comments below (please refrain from bad language, derogatory statements and obscenities).