Dive Brief:
- International buyers, who often took advantage of bargains and helped stabilize U.S. markets, are seeing fewer opportunities as the dollar grows stronger.
- “Foreign buyers have been a big part of the rebound in home prices in the U.S.,” said Stan Humphries, chief economist at real estate website Zillow. “The recent strength of the U.S. dollar has significant implications for the attractiveness of the market for foreign buyers.”
- The Wall Street Journal, using information from Zillow, reported the price of a property in Miami has doubled for buyers using Russian rubles and increased at least 20% for anyone using euros or Canadian dollars in New York and Phoenix.
Dive Insight:
While some potential buyers are turning away, others see the strong U.S. dollar as an indicator that American real estate is a good long-term investment. Real estate agents report Chinese and South American buyers are quick to snag U.S. properties, despite the fact that most will sit empty or be used for vacations.
In contrast to the reluctance towards residential investments, foreign investors in the commercial real estate space are seeing significant gains, as they are attracted to low warehouse and light-industrial building vacancy rates.