Main Content

Foreign Investment in United States’ Real Estate is Down, Marking an Opportune Time for Local Buyers to Invest

The Real Deal

Everything Real Estate in the San Fernando Valley
Tuesday July 7, 2020
Foreign Investment in United States’ Real Estate is Down, Marking an Opportune Time for Local Buyers to Invest

A little-known fact about the housing market is that foreign purchase of residential properties is a substantial force in the market from coast-to-coast. In fact, overseas real estate investments rose as high as $153B between 2011 and 2017; approximately 60% of foreign buyers are recent immigrants, while others purchase homes in the US as investment properties. Thus, foreign purchasers have a significant impact on housing prices vis-à-vis increased demand and deep pockets. Given the resurgence of COVID-19 in the United States, and the fact that we are essentially persona non grata to the rest of the world, that money-well is temporarily drying up. 
Less populace cities in the Midwest are unlikely to feel this burden much, as foreign investors don’t typically invest in properties where they are statistically less well received, but major coastal hubs like Los Angeles and New York City will feel the impact more pointedly. Pair that with this administration’s June 22, 2020 order barring immigrants from obtaining certain employment-based visas, and the problem becomes worse. 
This should be welcome news for buyers who have been priced out of the market by outside investors with very deep pockets. Moreover, without this factor artificially inflating the prices of homes, the issue of affordability should become less salient; houses become even more affordable when we consider historically low mortgage rates. 
It is a safe bet that once COVID-19 becomes less of an issue in the United States, foreign investment will resume, and housing prices will continue on their upward trajectory. As such, buyers who are considering waiting the virus out would be ill-advised to do so; the time to purchase homes is now. 
At the Chernov Team we understand that knowledge is power, and knowledge of how international investors impact the buyer-side housing market is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.


Stay Connected

Sign up to Access:

Exclusive private listings S.F. Valley market insights VIP events

    Thanks for signing up!
    By signing up you agree to our Terms & Conditions

    More Blog Posts

    To Love
    Monday September 20, 2021

    On September 16, 2021, Governor Newsom signed one of four planned bills directed at enabling housing construction i...

    Read Full Post
    Tuesday September 14, 2021

    Since the onset of the pandemic a year-and-a-half ago, sellers have been a lot like the Los Angeles Dodgers – the...

    Read Full Post
    Friday September 3, 2021

    For the sake of not rocking the boat, let’s put aside the question of what is causing climate change and simply a...

    Read Full Post
    Monday August 30, 2021

    On Thursday, August 26, 2021, the Supreme Court of the United States (“SCOTUS”) struck down the Biden Administr...

    Read Full Post
    Tuesday August 24, 2021

    On August 23, 2021, the National Association of Realtors (“NAR”) reported that existing home-sales rose 2% betw...

    Read Full Post
    Monday August 16, 2021

    The new construction sector of the housing market has been seeing positive signs. To briefly recap, the cost of lum...

    Read Full Post