Mexico ranked third, after Canada and China, in international purchases of U.S. residential real estate in the year through March 2013, according to the National Association of Realtors. The report, 2013 Profile of International Home Buying Activity, an analysis of data gathered from realtors, reports that nearly 50% of purchases by Mexicans in the U.S. were in suburban areas and about 30% in resort areas. The vast majority, 91%, were residential purchases of detached single-family homes. The average price was $156,250 and 48% of the purchases were made with cash. California and Texas accounted for 62% of all Mexican purchases; San Diego, El Paso, Laredo, San Antonio, and Las Vegas, were Mexican buyers’ preferred cities.
The United States’ proximity and security are the most attractive
features for Mexicans when it comes to buying residential real
estate. Asked if there were other factors, Sergio Aguayo, a political
scientist with the Colegio de Mexico, explained that Mexico has a large
number of millionaires. According to WealthInsight,
at the end of 2012, there were approximately 145,000 individuals with
$1 million or more in assets, whose total combined wealth was $736
billion which equals to 43% of total individual wealth held in
Mexico. Other reasons, Aguayo said, “are the American cultural
attraction and the Mexicanization of large parts of the U.S.”
In the 12 month period ending March 2013, five countries
accounted for the bulk of the international purchases: Canada (23%),
China (12%) and Mexico (8%), followed by India and the United Kingdom,
with 5% each. In 2007, Mexico was leading international purchases,
accounting for 13% of all, but the increase in real estate prices and
the weakening of the Mexican peso against the dollar, plus the strength
of the Chinese Yuan, contributed to Mexico dropping to third place.
International buyers fall into two different categories. The first
are foreign citizens with permanent residence outside the U.S. These
people typically purchase property for investments, vacations, or visits
to the U.S. The second category are recent or temporary visa holders.
For the 12 months covered in the NAR’s report, the total sales volume to
international clients is estimated at $68.2 billion, 6.3% of the total
homes sales market of $1.08 trillion for the same period. The main
factors influencing the decision to purchase in the U.S. are
profitability and security.
The types of homes purchased by international buyers are different
from homes purchased by domestic buyers. The international non-resident
is likely to be substantially wealthier than the average domestic buyer
and may be looking for a trophy property. They are more affluent than
most buyers, looking for properties in specialized niches, such as a
large estate suitable for multi-generational living, or a property that
establishes the individual’s presence and standing in the community.
Source: Forbes Magazine