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Economic News

International home buyers spend 35% more per transaction

According to new data from the National Association of Realtors, international buyers spend considerably more in America than natives do.

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Report on international buyers

According to the National Association of Realtors (NAR), home buyers from outside of the United States spend an median price of $252,000 per transaction, while the median price tag of those inside of the borders is $165,000, a difference of $87,000, or 35 percent. For Realtors, that represents an average of $2,610 more per transaction when working with an international buyer at 3.0 percent commission.

The average price of a home purchased in 2012 by an international buyer is $400,000, and the average price of a home purchased by an American in 2012 is $212,000. So while the median price is about 35 percent different, the average spend is nearly double for international buyers.

More than what it means for a Realtor’s bottom line, it is important to note that the real implication of this new data is that international sales are “becoming a key part of the real estate business and will only get more important,” notes the NAR. Not only is the price of homes selected by international buyers higher, but the volume of international buyers entering the market is up, as housing prices have decreased in the States.

International buyers are an attractive market for real estate professionals, as just last year, NAR reports that almost two-thirds of international buyers bought using cash, up from about a third in 2007 – and cash closes much easier than a potentially lengthy financing process.

An emerging trend is that the international sales is not just in Florida, Arizona, and California, where the bulk of buyers is, but the trend lines are moving up for other states. It’s “not just sun and sand,” says the NAR.

Where do the buyers come from?

For many years, Canada has been a major source of investment in American properties, accounting for 23 percent of all of 2011’s $82 billion in international sales. As mentioned, $82 billion was spent in 2011 by international buyers, up from $66 billion in 2010, representing a 24 percent increase in just one year.

Although continuing to be in the top five origins of international buyers, investment from the UK and Mexico are on the decline, meanwhile, China is increasingly spending more on home purchases in the United States.

What do the buyers want?

NAR says Canadian buyers still focus on sun and sand states, seeking warmer weather, while California continues to attract investment from Asia and the East Coast attracts European buyers.

International buyers come to Realtors primarily through referrals (55 percent), followed by online marketing, which accounts for 21 percent of business. We have long encouraged Realtors to blog about housing in other languages they are fluent in besides English, to appeal to the growing international market.

Over one in four Realtors handled at least one international deal last year, and that figure will likely increase in coming years, not just because of the attractive cash deals at higher prices, but because investors from other nations see how low pricing has fallen in the U.S., and we have very long road to recovery ahead of us, making international buyers and our housing situation a perfect match.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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3 Comments

3 Comments

  1. dougzwinton

    June 13, 2012 at 6:09 am

    If you are planning a mortgage refinance then you should search online for 123 Refinance before you decide they found 3.25% refinance with bad credit history and also did instant analysis of my mortgage. Learn the secrets of Refi it will save you money.

  2. Pakistan Real Estate

    July 6, 2012 at 2:39 am

    According to the above mentioned facts and figures the International investors are investing more in American real estate rather than the natives do. The international investors are attracted towards the US real estate because it still has the charm and charisma in it. But, the reason of fewer investments by locals is that the recession and unemployment has nearly cut Americans’ net worth in half.

  3. Tina Dole

    September 25, 2012 at 12:31 pm

    I am thinking about becoming an <a href=”https://www.mypurchasingagent.com/about/”>international buyer</a> and I have been looking up any kind of article I can about purchasing homes, goods, etc. Thank you for the interesting article. It was enjoyable to read, and also very informative.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

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Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

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The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.

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Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.

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Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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