Data NAR's 2024 Report

Recently at Williams Luxury Homes we reviewed the 2024 Profile of International Transactions in U.S. Residential Real Estate by the National Association of REALTORS® (NAR). This report is vital for grasping the influence of buyers on the U.S. real estate sector, in Arizona. The data provided enable us to stay proactive especially as Arizona remains a point for global interest. Here's what we discovered to be significant, for our market and beyond.

Arizona Attracts Interest From Buyers Around The World

Arizona remains a choice for overseas investors and made up 5 percent of all real estate transactions by international buyers in the United States in 2024 – with Canadians at the forefront due to the states appeal in terms of location weather and cost compared to other favored American destinations.

Enough​ ​the majority of out of state buyers in Arizona hail from Canada – drawn in by the sunny weather and prospects for vacation homes​. Arizona stands as the fourth most favored destination for foreign investors after Florida​ denoting its status as a sought after market for global real estate​.

Arizona’s foreign buyer market is driven by several factors:

• Affordable housing compared to states like California
• Strong rental market, making it an attractive option for investors
• Year-round sunshine, which appeals to retirees and vacationers
• Easy access to major cities with direct flights from Canada

Despite rising home prices, foreign interest in Arizona real estate remains robust, positioning the state as a significant player in the global market.

Also Read: Four Greater Phoenix Cities In The Top 10 For Gen Xers To Retire

Markets Such As Sedona & Greater Phoenix Have A High Appeal

U.S. Real Estate Foreign Buyer Trends

The 2024 NAR report also discusses the changing patterns of investment in the U.S. noting a decrease in foreign buyers attributed to the robust U.S dollar and increasing housing costs; however interest in American real estate, from international investors remains strong and enduring.

From April 2023 to March 2024:

• 54,300 foreign buyers purchased U.S. homes, accounting for 1.3% of all home sales
• Total dollar volume of foreign transactions reached $42 billion
• Foreign buyers spent an average of $780,300 per home, significantly higher than domestic buyers

Buyers from overseas often hail from nations such as Canada and China to Mexico and India and Colombia well. They mostly show a preference for residences and holiday homes. Foreign buyers continue to favor all cash deals in the United States due to its reputation as a secure investment haven, amidst worldwide economic instability.

Financing & Preferences

Foreign buyers are known for making large cash purchases:

• 50% paid all-cash
• 45% bought properties for vacation or rental purposes
• 68% of non-resident buyers (those who live outside the U.S.) paid all-cash

Investors from abroad frequently focus on luxury residences and typically opt for pricier properties when making purchases in locations, like Arizona. Their influence is substantial as it propels housing costs upward and intensifies market competition.

Also Read: Why Are Californians Moving To Arizona?

Many Californians Are Purchasing New Homes In Arizona

Shifts In The Arizona Luxury Market

The upscale housing market in Arizona has long been a magnet for purchasers and this trend continues into 2024 as well. Arizona distinguishes itself by offering a blend of luxury and reasonable pricing compared to renowned cities such, as San Francisco and Hong Kong.

For foreign buyers, the price of a luxury home in Arizona offers incredible value. Here’s how Arizona’s prices stack up globally:

• Phoenix, AZ: $3,320 per sq. meter
• San Francisco, CA: $7,520 per sq. meter
• Hong Kong: $18,845 per sq. meter

Arizona real estate is popular among buyers looking for value due to its cost effectiveness and lifestyle benefits that also offer investment potential. People from China and India are especially interested in the areas of Arizona with the Greater Phoenix Metro standing out as a key center for technology driven development.

Luxury Market Appeal

Arizona is becoming increasingly popular among foreign buyers seeking second homes or investment properties due to its lower cost per square meter compared to major cities worldwide. This is especially true as home prices soar globally.

Also Read: Soaring Land Prices Seen In Greater Phoenix’s Luxury Markets

Many Parcels Of Land In Arizona Are Large In Size

A Snapshot Of Key Stats

Here are some of the most intriguing stats from the 2024 NAR report that highlight the significant impact of foreign buyers on U.S. real estate:

1. $42 billion in U.S. residential sales attributed to foreign buyers
2. 54,300 foreign home purchases from April 2023 to March 2024
3. 50% of foreign buyers paid all-cash
4. 68% of non-resident foreign buyers made all-cash purchases
5. 45% of foreign buyers purchased for vacation or rental use
6. Foreign buyers spent an average of $780,300 per home
7. Top destinations: Florida (20%), Texas (13%), California (11%), and Arizona (5%)
8. Canada led the way with 13% of foreign buyers
9. Chinese buyers accounted for 11% of purchases, despite a drop in volume
10. Mexico and India tied at 11% of foreign buyer activity
11. Median home price for foreign buyers: $475,000
12. Foreign buyers make up 1.3% of all U.S. home sales
13. 57% of foreign buyers already reside in the U.S.
14. Colombian buyers are most likely to purchase homes for rental use
15. Arizona ranks fourth for foreign home purchases, behind Florida, Texas, and California

These statistics paint a picture of a market that remains highly competitive. Not to mention lucrative for foreign buyers, particularly in states like Arizona.

Also Read: The Many Niches Of Arizona’s Luxury Real Estate Market

Arizona's Luxury Markets Appeal To Global Wealth

International Real Estate Investment Challenges

While foreign buyers are eager to invest in U.S. real estate, they do face hurdles. The report highlighted several obstacles that have prevented some buyers from completing their purchases. These challenges include:

• Finding available properties
• Rising property costs
• Financing difficulties
• Currency exchange rates

Interestingly, 36% of REALTORS® reported that their international clients couldn’t find a suitable property to purchase! And 32% were deterred by high property costs. Financing also remains a concern, with 17% of foreign buyers unable to secure mortgages.

These barriers demonstrate the complexity of the international real estate landscape. Yet, despite these challenges, the U.S. housing market remains highly attractive to foreign buyers due to its relative stability and investment potential.

Our Final Thoughts

Arizona remains a choice for global purchasers. This is due to its mix of reasonable prices and high end options coupled with promising opportunities, according to the findings from the Profile of International Transactions in U.S. Residential Real Estate. What is shown is that overseas investors significantly influence Arizona's real estate scene (with Canadians taking the lead).

At Williams Luxury Homes, we strive to assist purchasers in understanding the intricacies of the Arizona real estate market. With much experience, we do this efficiently and effectively Whether you seek a holiday retreat an investment asset or a forever home? Our professionals are well versed in facilitating your journey with ease and achieving positive outcomes

Arizonas attraction to purchasers extends beyond mere figures; it encompasses the unique lifestyle and promising future global prospects. We look forward to collaborating with individuals, from corners of the world as we assist them in discovering their perfect real estate investment in The Grand Canyon State.