Can Foreign Buyers Save the U.S. Housing Market?
Interest in U.S. real estate from abroad could breathe life into the flattening housing market
Ultra-low and declining home prices are a headache for homeowners, but they might also be the key to healing the housing market as foreign investors snap up real estate bargains in
Internationally oriented sales amounted to
Canadians led sales overall, accounting for almost a quarter of foreign home buyers, followed in smaller numbers by
Experts hope the uptick in foreign interest in the U.S. real estate market will help sop up the massive oversupply of housing in markets such as
"Foreign buyers are sort of like a white knight to the new development space because they're paying all cash," says
"The major reason the inventory in
The extreme volatility of financial markets and uncertainty about the economic policy direction of major players such as
"Marquee locations in the U.S. stand to benefit from the concern globally about financial stability," Miller says. "[Low home prices] make it more attractive [to invest in real estate] and it helps us slowly unwind the shadow inventory."
The declining value of U.S. currency has been an additional boon to buyers from abroad. Save for a temporary spike in September, most of 2011 has been characterized by a falling dollar, which means foreigners can buy more goods and services -- in this case real estate -- for the same amount of their native currency.
The influence of foreign investors and their potential to help the housing market hasn't been lost on legislators. To help fuel demand, Democratic Sen.
"This is a way to create more demand without costing the federal government a nickel," Schumer told the
Although experts agree the plan could boost markets that tend to attract foreign buyers -- think
"They just need to make sure approval can keep up with demand," Grout says, adding that foreign buyers already face a multitude of challenges when trying to buy in
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