Approximately two-thirds of foreign homebuyers during 2014 paid cash for their property.
A survey by the California Association of Realtors found that 14% of those surveyed closed on homes with an international buyer, similar to 2013. Meanwhile, Chinese buyers made up 36% of all international clients, far eclipsing any other country.
While the proportion of international buyers paying cash dipped in 2014, a strong 66% of international buyers made all-cash transactions for their properties, the survey found. Those buying homes below $500,000 were more likely to pay all cash than those purchasing more expensive homes at a rate of 66% versus 57%.
A similar price divide played out in terms of international buyers’ choice to purchase a home as an investment. For homes prices below $500,000, 40% were an investment, as opposed to 34% for homes over $1 million and 17% for homes between $500,000 and $1 million, according to the survey.
Beyond China, large numbers of international buyers hailed from Canada, Mexico, the United Kingdom and India. The stability of the international demand for California homes in 2014 bucked the trend that otherwise saw a slide in the California housing market amidst appreciation of the U.S. dollar.
Other common reasons behind international buyers’ choice to purchase a home in California included being closer to friends and family, because they have a business in the U.S. or because their child is attending college stateside.
Overseas clients also showed a higher level of affluence than domestic buyers in 2014, with the median price of a single-family home landing at $490,000 as compared to $447,000, CAR found.