2014 Profile of International Home Buying ActivitySummary of Report at

http://www.realtor.org/reports/profile-of-international-home-buying-activity

Lawrence Yun, Senior Vice President & Chief EconomistJed Smith, Managing Director, Quantitative Research

Gay Cororaton, Research Economist

Dollar Volume Sales to International BuyersApproximately 7 Percent of Total Market Dollars

Increases in 2014 Due to Rising Prices and Volumes

2011 2012 2013 2014

$ 66.4

$ 82.5

$68.2

$92.2

Estimated Sales Dollar Volume of U.S. Residential Property to Foreign Buyers ( in Billion Dollars)

Estimate is for 12 month period April 2013 - March 2014.

Sales to Foreigners: Modest GrowthApproximately 5 percent of Total Residential Transactions

2010 2011 2012 2013 20140

1000000

2000000

3000000

4000000

5000000

6000000

Domestic International

International Buyers: 7% of $1.2 Trillion MarketFive Countries: 54 Percent of Total International Sales

Sales ($) % Share Sales ($) % Share Canada $11.8 17% $13.8 15%China $12.8 19% $22.0 24%Mexico $3.6 5% $4.5 5%India $3.9 6% $5.8 6%United Kingdom $4.2 6% $5.8 6%

Total International Sales $68.2 $92.2

Estimate of International Sales from Major Buyers

2013 2014 ( In Billion Dollars)

Canada Leads in Number of TransactionsChina Leads in Dollar VolumeCanada: $13.8 Billion; China: $22 Billion

Brazil Canada China* France Germany India Japan Mexico Russia United King-dom

2010 0.01 0.23 0.09 0.03 0.04 0.05 0.01 0.1 0.03 0.09

2011 0.03 0.23 0.09 0.04 0.04 0.07 0.02 0.07 0.01 0.07

2012 0.03 0.24 0.12 0.03 0.03 0.06 0.01 0.08 0.02 0.06

2013 0.0197044334975369

0.22824302134647

0.119868637110016

0.0197044334975369

0.0311986863711002

0.0541871921182266

0.00821018062397373

0.0821018062397373

0.0164203612479475

0.049

2014 0.021 0.188 0.164901664145235

0.021 0.032 0.054 0.02 0.086 0.012 0.05

3%

8%

13%

18%

23%

28%

Distribution of International Transactions by Country of Origin

Transactions Concentrated in Four StatesPercent of Total Foreign Transactions by State

Foreign Purchasers: Geographic Preferences

Canadians: Las Vegas, Detroit, Los Angeles, Ft. Lauderdale, Miami, Orlando

Florida Arizona California Texas Washington Other States

40%

23%

10%

3% 3%

21%

Canadian Home Buyer Preferences Percent Distribution of Total Canadian

Purchases

Chinese: Los Angeles, San Francisco, Irvine, New York, Las Vegas

California Washington New York Pennsylvania Texas Other States

35%

9%7% 6% 6%

36%

Chinese Home Buyer PreferencesPercent Distribution of Total Chinese Purchases

Foreign Purchasers: Geographic Preferences

Indians: Los Angeles, Las Vegas, Chicago, Dallas, New York

California Illinois Pennsylvania Texas Arizona Other States

17%

8% 8% 8%6%

53%

Indian Home Buyer PreferencesPercent Distribution of Total Indian Purchases

U.K.: Los Angeles, Orlando, Houston, Las Vegas, Kissimmee

Florida California Texas Maine Maryland Other States

45%

12%9%

6% 6%

21%

U.K. Home Buyer PreferencesPercent Distribution of Total U.K. Purchases

Florida Popular with Latin Americans, Canadians, and Europeans

Africa Asia/Oceania Europe Latin America (inc Mexico)

North America (exc Mexico)

Middle East Unknown

1%

8%

28%26%

34%

3% 2%

Distribution of International Clients Purchasingin Florida

California: Popular with Asians and Canadians

Africa Asia/Oceania Europe Latin America (inc Mexico)

North America (exc Mexico)

Middle East Unknown

0%

62%

16%

4%

13%

1%3%

Region of Origin of International Clients Purchasingin California

Arizona: Particularly Popular with Canadians

Africa Asia/Oceania Europe Latin America (inc Mexico)

North America (exc Mexico)

Middle East Unknown

0%

11%8%

3%

74%

3% 3%

Region of Origin of International Clients Purchasingin Arizona

Texas: Popular with Latin Americans, Particularly Mexicans

Africa Asia/Oceania Europe Latin America (inc Mexico)

North America (exc Mexico)

Middle East Unknown

4%

18%

9%

59%

5%3% 3%

Region of Origin of International Clients Purchasingin Texas

Foreign Sales Tend to be at Higher End of Market

Mean Price Median PriceU.S. Existing Home Sales $247,417 $201,700International Sales $396,180 $268,284

Average Mean and Median Prices from April 2013-March 2014

2009 2010 2011 2012 2013 20140%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

51%56% 54%

45%54%

46%

30%28% 28%

30%

23%29%

12% 10% 13%15%

15%16%

7% 7% 5% 10% 7% 9%

Purchase Price(Percentage Distribution)

up to $250,000 $250,001 to $500,000$500,001 to $ 1M $ 1M up

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Prices Paid by Buyers Vary by Country of Origin

Canada China India Mexico United Kingdom

Median Price 212500 523148.148148148 342857.142857143 141071.428571429 350000

Mean Price 314717.741935484 590825.688073395 459027.777777778 224122.807017544 499242.424242424

$50,000

$150,000

$250,000

$350,000

$450,000

$550,000

$650,000

Purchase Prices of Top 5 International Homebuying Countries Based on Reported Transactions from Apr 2013-Mar 2014

Cash Sales Are in the Majority

2007 2008 2009 2010 2011 2012 2013 20140%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

28%43%

46%

55% 62% 62% 63% 60%

69%54%

52%44%

36% 37% 35% 38%

Type of Financing(Percentage Distribution)

All cash (no mortgage financing) With mortgage financing Don't know

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Foreigners Buy for a Variety of Reasons

2009 2010 2011 2012 2013 20140%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

20% 18% 21% 21% 22% 25%

32%29% 27% 31% 31% 31%

40% 45% 43% 40% 39% 37%

8% 8% 9% 8% 8% 7%

Most Important Factor Influencing Purchase(Percentage Distribution )

U.S. real estate is viewed as a secure investment. U.S. real estate is viewed as profitable investment. U.S. is viewed as a desirable location.

Other

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Not All Potential Foreign Clients Purchase a HouseForeigners Don’t Buy for a Variety of Reasons

2009 2010 2011 2012 2013 20140%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

10%18% 21% 26% 24% 25%1%2% 1%

1% 1% 2%30%26%

28%33%

29% 30%9%

8%8%

6%7% 9%21%

25% 22%18% 21% 19%

28% 21% 20% 16% 17% 16%

Reasons for Not Buying(Percentage Distribution )

Could not find a property to purchase Loss of home country benefits Cost/taxes/ insurance Immigration laws Financing issues

Other

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International Sales Tend to be Concentrated in Real Estate Practices

2009 2010 2011 2012 2013 201480%82%84%86%88%90%92%94%96%98%

100%

91% 91%87% 88% 87% 88%

6% 6%9% 8% 9% 8%

3% 4% 4% 5% 4% 4%

Number of International Clients, Whether or Not Client Purchased a Property (Percentage Distribution)

1 to 5 6 to 10 11 or more

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Transactions Tend to be Concentrated in Specialists28 Percent of REALTORS® Have More than 10 Percent of Their Business with

International Clients

2009 2010 2011 2012 2013 20140%

10%20%30%40%50%60%70%80%90%

100%

34%24% 22% 21% 16% 18%

49%54% 51% 52% 58% 54%

17% 22% 27% 27% 26% 28%

Percent of Transactions with International Clients for REALTORS® with International Clients(Percentage Distribution)

0% 1 to 10% more than 10%

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REALTORS® Have Both Resident and Non-Resident Clients

2010 2011 2012 2013 20140%

10%20%30%40%50%60%70%80%90%

100%

41% 44% 38% 38% 35%

38% 33% 37% 36% 34%

21% 23% 25% 26% 30%

Types of International Clients(Percentage Distribution)

TypeA (Foreign Client) TypeB (Recent Immigrant) Both Types

Steady Net Growth in Number of Clients

2009 2010 2011 2012 2013 20140%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

15% 19% 19% 18% 21% 20%

57%56%

53% 55%53%

48%

9%10%

9% 9% 7%6%

19% 15% 19% 17% 19%26%

Change in International Clients: Past 5 Years(Percentage Distribution )

Increased Stayed about the same Decreased Not applicable, have been in business less than 5 years

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2014 Profile of International Home Buying ActivityMajor Conclusions

• International Sales a Niche Market.– 7 Percent of total U.S. Home Sales by Dollar Volume.– Slow Growth/Varies from Year to Year.– Specialized Experience in Serving Buy-Side Important: Knowledge of language, customs,

culture necessary in serving clients.• A Concentrated Market.

– States: 55 percent of Transactions Concentrated in Florida, California, Texas, and Arizona.– Countries: 54 percent of Transactions by Nationals from Canada China, India, Mexico, U.K.

• International Buyers are Diverse.– Motivations include investment, personal use (permanent or vacation), asset diversification.

• International Buyers Need Assistance.– U.S. real estate Practices Differ from Foreign Practices– Cultural as Well as Day-to-Day Differences Between U.S. and Other Countries.

• Sources of Clients– Generally Through Referral.– Websites Also a Source.