2017 Profile of International Residential Transactions of Raleigh Regional Association of REALTORS Members

Transcription

1 2017 Profile of International Residential Transactions of Raleigh Regional Association of REALTORS Members Conducted for the Raleigh Regional Association of REALTORS by the National Association of REALTORS July 2017

2 Raleigh Regional Association of REALTORS Tessa Hultz, RCE, CAE, CIPS, epro Raleigh Regional Association of REALTORS, CEO Triangle MLS, President/CEO Casey R. Angel, APR Director of Communications National Association of REALTORS Research Division Dr. Lawrence Yun, Senior Vice President and Chief Economist Danielle Hale, Managing Director, Housing Research Gay Cororaton, Research Economist This Report may be cited with the proper attribution Raleigh Regional Association of REALTORS and the National Association of REALTORS July 2017

3 About the 2017 RRAR Survey The 2017 Report presents information on international client transactions during the 12-month period of April 2016 March 2017 among members of the Raleigh Regional Association of REALTORS (RRAR). RRAR sent the online survey to its nearly 7,000 members, 303 of which responded to the survey from April 13 April 27, 2017, a response rate of four percent. The survey s overall margin of error at the 95 percent level of confidence is six percent. The margin of error for subgroups will be larger. Of the 303 respondents, 92 percent reported Wake County as the primary business area, with other respondents coming from the counties of Durham, Harnett, Johnston, Orange, Chatham, Franklin, and Granville.

4 2017 RRAR Survey Respondents Respondent's Office Location Number of Respondents Percent of Respondents RRAR Membership Percent of Membership Wake % 6, % Durham 8 2.6% % Harnett 4 1.3% % Johnston 4 1.3% % Orange 3 1.0% % Chatham 2 0.7% % Franklin 2 0.7% % Granville 1 0.3% 6 0.1% Other Counties and Out of State 0 0.0% % Total % 7, % Response Rate 4%

5 Types of International Clients The term international or foreign client refers to two types of clients: Non-resident foreigners (Type A): Non-U.S. citizens who primarily reside outside the United States and who don't stay in the United States year-round. Resident foreigners (Type B): Non-U.S. citizens who are temporarily residing in the United States on non-immigrant visas, such as diplomats, foreign students, and foreign workers or recent immigrants who have been in the United States for less than two years as of the time of the transaction.

6 Highlights Majority of RRAR foreign buyers were resident foreigners (77 percent), higher than the share among all U.S. foreign buyers (58 percent). China, India, Mexico, Canada, El Salvador, and United Kingdom were the major sources of foreign buyers. Wake County was the major destination (78 percent), followed by Durham (16 percent), Harnett (three percent), and Vance (three percent). The median purchase price among foreign buyers was $275,001,which is higher than the median purchase price of RRAR existing home sales of $234,393. The average purchase price was $331,081.

7 Highlights Because most buyers are resident buyers, 32 percent paid all-cash, lower than the share among all U.S. foreign buyers (50 percent). Among respondents, 31 percent reported working with an international client, about the same share reported in the U.S. survey (29 percent). On average, respondents closed one international transaction per year. Five percent reported closing more than five international transactions. Among respondents, 58 percent reported an increase in international business over the past five years, higher than the case nationally (35 percent). Two in five expect a decrease in international transactions in the next 12 months; a similar share was uncertain about the outlook.

8 Highlights Difficulty obtaining financing, finding a property, and moving money out of the country were the major reasons clients decided not to purchase. Personal and business contacts and former clients accounted for 65 percent of all foreign buyer referrals/leads. Nine percent reported working with U.S. clients who were interested in purchasing property abroad, mostly in Latin America and Europe.

9 Characteristics of International Clients

10 RRAR International Clients Purchased $951 Million of Residential Property Foreign Buyer Purchases, $951 Non-foreign Buyer Purchases, $9,468

11 77 Percent of Foreign Buyers Were Resident Foreigners, Higher Than the 58 Percent Share Among All U.S. Foreign Buyers 77% 58% 42% 23% Non-resident (Type A) Resident (Type B) Raleigh Foreign Buyers U.S. Foreign Buyers

12 Asia/Oceania, Latin America/Caribbean, and Europe Were the Major Regions of Origin of Foreign Buyers 34% 35% 27% 24% 24% 16% 12% 9% 5% 4% 5% 5% Raleigh Foreign Buyers U.S. Foreign Buyers

13 Top Buyers: China, India, Mexico, Canada, El Salvador, and United Kingdom 20% 7% 7% 5% 5% 5% China India Mexico Canada El Salvador United Kingdom

14 Destinations: Wake, Durham, Harnett, and Vance 78% 16% 3% 3% Wake Durham Harnett Vance

15 Foreign Buyers Typically Paid More than RRAR s Homebuyers But Less Compared to All U.S. Foreign Buyers $275,001 $235,000 $302,290 Raleigh Foreign Buyers All Raleigh Home Sales U.S. Foreign Buyers *The median is the middle value of the distribution. Half of all purchases fall below this value and half are above this value. Because home values tend to skew to the higher end, the median is often a better reflection of typical market activity. However, the average (mean) price is used in calculating the dollar volume of purchases. The average foreign buyer purchase price was $331,031.

16 32 Percent of Foreign Buyers Paid All-Cash Compared to 50 Percent Among All U.S. Foreign Buyers; U.S. Mortgages were More Common in Raleigh 62% 32% 50% 42% 3% 5% 2% 2% All-Cash Mortgage Loan from Mortgage Loan from U.S. Sources Home Country Raleigh Foreign Buyers Investors/Other U.S. Foreign Buyers Don't Know

17 68 Percent of Foreign Buyers Purchased a Primary Residence Compared to 49 Percent Among All U.S. Foreign Buyers 68% 49% 12% 3% 18% 14% 9% 5% 4% 5% 5% 5% 4% Vacation Home Residential Investment Both Vacation Home and Residential Investment Primary Residence Property for Use by Student(s) Other Don't Know Raleigh Foreign Buyers U.S. Foreign Buyers

18 78 Percent of Foreign Buyers Purchased Detached Single-family Homes Compared to 64 Percent Among All U.S. Foreign Buyers 78% 64% 8% 12% 8% 17% 3% 2% 3% 5% Detached singlefamily Townhouse/row house/duplex Condominium or Cooperative Residential Land Other Raleigh Foreign Buyers U.S. Foreign Buyers

19 Foreign Buyers Preferred Suburban and Central City/Urban Areas Type of Area Where Foreign Buyers Purchased Property 51% 52% 35% 27% 14% 14% 6% Central City/Urban Area Suburban Area Small Town/Rural Area Resort Area Raleigh Foreign Buyers U.S. Foreign Buyers

20 REALTOR Experiences Working with International Clients

21 31 Percent of Respondents Reported Working With an International Client, About the Same Nationally 69% 71% 11% 10% 6% 7% 5% 4% 1% 2% 2% 2% 1% 3% 4% 2% to or more Raleigh Foreign Clients U.S. Foreign Clients

22 58 Percent of Respondents Reported an Increase in International Business Over the Past Five Years Compared to 35 Percent Nationally 58% 48% 35% 26% 16% 17% Increased Stayed about the same Decreased Raleigh Foreign Clients U.S. Foreign Clients

23 Roughly Half of Respondents Reported International Business Stayed About the Same as in the Past Year, About the Same Nationally 48% 50% 35% 34% 17% 17% Increased Stayed about the same Decreased Raleigh Foreign Clients U.S. Foreign Clients

24 Nearly Two in Five Raleigh REALTORS Expect Decreased Foreign Buyer Activity in the Next 12 Months; A Similar Share was Unsure 37% 38% 21% 5% Increased Stayed about the same Decreased Don t Know

25 Personal and Business Contacts and Former Clients Were the Major Sources of Foreign Buyer Referrals or Leads 24% 24% 22% 23% 19% 11% 8% 10% 11% 5% 6% 6% 6% 1% 3% 8% 5% 8% Raleigh Foreign Buyers U.S. Foreign Buyers

26 Difficulty Obtaining Financing, Finding a Property, and Moving Money Were the Major Reasons Clients Decided Not to Purchase 59% 51% 41% 41% 29% 28% 31% 27% 27% 28% 23% 21% 23% 14% 17% 20% 9% 10% 11% 5% 5% 5% 1% 5% 0% Raleigh Foreign Clients U.S. Foreign Clients

27 31 Percent of Raleigh Respondents Reported the Client Viewed U.S. Prices as Less Expensive Than Prices in Home Country 35% 35% 31% 30% 28% 26% 6% 9% Less expensive than prices in the home country About the same as prices in home country More expensive than prices in the home country Don t know Raleigh Foreign Clients U.S. Foreign Clients

28 A Small Fraction of Respondents Reported That They Worked With a U.S. Client Seeking to Purchase Property Abroad 91% 4% 3% 1% 1% No client who was interested in finding property outside the U.S. Could not refer the client to anyone Referral to a business contact in another country Helped the client search directly Referral to a business contact in the U.S. who works with international clients

29 Countries of Interest to Clients Searching For Property Abroad Latin America: Brazil, Costa Rica, Dominican Republic, Mexico Europe: Germany, Greece, Spain, Switzerland Asia: Singapore North America: Canada

30 2017 Profile of International Residential Transactions of Raleigh Regional Association of REALTORS Members Conducted for the Raleigh Regional Association of REALTORS by the National Association of REALTORS July 2017