Foreign homebuyer activity lessens and diversifies
Foreign homebuyers have helped the flow of the housing recovery significantly, but it seems rising prices may be steering some foreign buyers away from the U.S. market.
Of the 10 housing markets that have the highest share of searches on Trulia [stock TRLA][/stock] coming from another country, eight are on the decline. Only two markets, Los Angeles and San Francisco, saw a rise in foreign search traffic in the past year.
But even though the share of home searches made by foreigners is declining, the foreign interest is becoming more diverse, said Trulia Chief Economist Jed Kolko.
"People from all corners of the globe are looking at U.S. homes," said Kolko, who added, "More searches are coming from rapidly-growing developing countries, especially in Asia and Africa."
Today, foreigners total 4.3% of all the home searches made on Trulia, a slight drop from 4.4% the previous year.
Most of the searches over the past year have come from Canada (19%), the United Kingdom (9%) and Germany (5%).
Home searches are on the rise from lower- and middle-income countries with strong economic growth and stronger spending power. In the past year, the share of searches from Nigeria, India, Russia, the Philippines, and China all leapt by more than 15% year-over-year.
But where are these foreign buyers looking to purchase in the U.S.?
"Foreigners are drawn to the rich-and-famous neighborhoods," said Kolko. "In some of the priciest neighborhoods in New York, Los Angeles, and Miami, more than one quarter of home searches come from other countries."
He added, "But most Americans live in neighborhoods that lack worldwide name recognition. In most neighborhoods, foreigners account for less than 3% of home searches."