2014 Profile of International Home Buying ActivitySummary of Report at

http://www.realtor.org/reports/profile-of-international-home-buying-activity

Lawrence Yun, Senior Vice President & Chief Economist

Jed Smith, Managing Director, Quantitative Research

Gay Cororaton, Research Economist

Dollar Volume Sales to International BuyersApproximately 7 Percent of Total Market Dollars

Increases in 2014 Due to Rising Prices and Volumes

$ 66.4

$ 82.5

$68.2

$92.2

2011 2012 2013 2014

Estimated Sales Dollar Volume of U.S. Residential Property to Foreign Buyers ( in Billion Dollars)

Estimate is for 12 month period April 2013 - March 2014.

Sales to Foreigners: Modest GrowthApproximately 5 percent of Total Residential Transactions

0

1000000

2000000

3000000

4000000

5000000

6000000

2010 2011 2012 2013 2014

Domestic International

International Buyers: 7% of $1.2 Trillion MarketFive Countries: 54 Percent of Total International Sales

Sales ($) % Share Sales ($) % Share

Canada $11.8 17% $13.8 15%

China $12.8 19% $22.0 24%

Mexico $3.6 5% $4.5 5%

India $3.9 6% $5.8 6%

United Kingdom $4.2 6% $5.8 6%

Total International Sales $68.2 $92.2

Estimate of International Sales from Major Buyers

2013 2014

( In Billion Dollars)

Canada Leads in Number of TransactionsChina Leads in Dollar VolumeCanada: $13.8 Billion; China: $22 Billion

Brazil Canada China* France Germany India Japan Mexico RussiaUnited

Kingdom

2010 1% 23% 9% 3% 4% 5% 1% 10% 3% 9%

2011 3% 23% 9% 4% 4% 7% 2% 7% 1% 7%

2012 3% 24% 12% 3% 3% 6% 1% 8% 2% 6%

2013 2% 23% 12% 2% 3% 5% 1% 8% 2% 5%

2014 2% 19% 16% 2% 3% 5% 2% 9% 1% 5%

0%

5%

10%

15%

20%

25%

30%

Distribution of International Transactions by Country of Origin

Transactions Concentrated in Four StatesPercent of Total Foreign Transactions by State

Foreign Purchasers: Geographic Preferences

Canadians: Las Vegas, Detroit, Los Angeles, Ft. Lauderdale, Miami, Orlando

40%

23%

10%

3% 3%

21%

Florida Arizona California Texas Washington OtherStates

Canadian Home Buyer Preferences Percent Distribution of Total Canadian Purchases

Chinese: Los Angeles, San Francisco, Irvine, New York, Las Vegas

35%

9%7% 6% 6%

36%

Chinese Home Buyer PreferencesPercent Distribution of Total Chinese Purchases

Foreign Purchasers: Geographic Preferences

Indians: Los Angeles, Las Vegas, Chicago, Dallas, New York

17%

8% 8% 8%6%

53%

Indian Home Buyer PreferencesPercent Distribution of Total Indian Purchases

U.K.: Los Angeles, Orlando, Houston, Las Vegas, Kissimmee

45%

12%

9%

6% 6%

21%

Florida California Texas Maine Maryland OtherStates

U.K. Home Buyer PreferencesPercent Distribution of Total U.K. Purchases

Florida Popular with Latin Americans, Canadians, and Europeans

1%

8%

28%

26%

34%

3% 2%

Africa Asia/Oceania Europe Latin America (incMexico)

North America (excMexico)

Middle East Unknown

Distribution of International Clients Purchasingin Florida

California: Popular with Asians and Canadians

0%

62%

16%

4%

13%

1%3%

Africa Asia/Oceania Europe Latin America (incMexico)

North America (excMexico)

Middle East Unknown

Region of Origin of International Clients Purchasingin California

Arizona: Particularly Popular with Canadians

0%

11%8%

3%

74%

3% 3%

Africa Asia/Oceania Europe Latin America (incMexico)

North America (excMexico)

Middle East Unknown

Region of Origin of International Clients Purchasingin Arizona

Texas: Popular with Latin Americans, Particularly Mexicans

4%

18%

9%

59%

5%3% 3%

Africa Asia/Oceania Europe Latin America (incMexico)

North America (excMexico)

Middle East Unknown

Region of Origin of International Clients Purchasingin Texas

Foreign Sales Tend to be at Higher End of Market

Mean Price Median Price

U.S. Existing Home Sales $247,417 $201,700

International Sales $396,180 $268,284

Average Mean and Median Prices from April 2013-March 2014

51%56% 54%

45%54%

46%

30%28%

28%

30%

23%

29%

12% 10% 13%

15%15%

16%

7% 7% 5%10% 7% 9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013 2014

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Purchase Price(Percentage Distribution)

up to $250,000 $250,001 to $500,000

$500,001 to $ 1M $ 1M up

Prices Paid by Buyers Vary by Country of Origin

Canada China India Mexico United Kingdom

Median Price $212,500 $523,148 $342,857 $141,071 $350,000

Mean Price $314,718 $590,826 $459,028 $224,123 $499,242

$-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

Purchase Prices of Top 5 International Homebuying Countries Based on Reported Transactions from Apr 2013-Mar 2014

Cash Sales Are in the Majority

28%

43%46%

55% 62% 62% 63% 60%

69%

54%52%

44%

36% 37% 35% 38%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009 2010 2011 2012 2013 2014

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Type of Financing(Percentage Distribution)

All cash (no mortgage financing) With mortgage financing Don't know

Foreigners Buy for a Variety of Reasons

20% 18% 21% 21% 22% 25%

32%29% 27% 31% 31%

31%

40% 45% 43%40% 39% 37%

8% 8% 9% 8% 8% 7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013 2014

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Most Important Factor Influencing Purchase(Percentage Distribution )

U.S. real estate is viewed as a secure investment. U.S. real estate is viewed as profitable investment.

U.S. is viewed as a desirable location. Other

Not All Potential Foreign Clients Purchase a HouseForeigners Don’t Buy for a Variety of Reasons

10%18% 21% 26% 24% 25%1%

2%1%

1% 1% 2%30%26%

28%

33%29% 30%

9%8%

8%

6%7% 9%21%

25%22%

18%21% 19%

28%21% 20% 16% 17% 16%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013 2014

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Reasons for Not Buying(Percentage Distribution )

Could not find a property to purchase Loss of home country benefits Cost/taxes/ insurance

Immigration laws Financing issues Other

International Sales Tend to be Concentrated in Real Estate Practices

91% 91%87% 88% 87% 88%

6% 6%

9% 8% 9% 8%

3% 4% 4% 5% 4% 4%

80%

85%

90%

95%

100%

2009 2010 2011 2012 2013 2014

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Number of International Clients, Whether or Not Client Purchased a Property (Percentage Distribution)

1 to 5 6 to 10 11 or more

Transactions Tend to be Concentrated in Specialists28 Percent of REALTORS® Have More than 10 Percent of Their Business with

International Clients

34%24% 22% 21% 16% 18%

49%54% 51% 52% 58% 54%

17% 22% 27% 27% 26% 28%

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014

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Percent of Transactions with International Clients for REALTORS® with International Clients(Percentage Distribution)

0% 1 to 10% more than 10%

REALTORS® Have Both Resident and Non-Resident Clients

41% 44% 38% 38% 35%

38% 33% 37%36% 34%

21% 23% 25% 26% 30%

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014

Types of International Clients(Percentage Distribution)

TypeA (Foreign Client) TypeB (Recent Immigrant) Both Types

Steady Net Growth in Number of Clients

15% 19% 19% 18% 21% 20%

57%56%

53% 55%

53%48%

9%10%

9% 9% 7%

6%

19% 15% 19% 17% 19%26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013 2014

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Change in International Clients: Past 5 Years

(Percentage Distribution )

Increased Stayed about the same Decreased Not applicable, have been in business less than 5 years

2014 Profile of International Home Buying ActivityMajor Conclusions

• International Sales a Niche Market.– 7 Percent of total U.S. Home Sales by Dollar Volume.– Slow Growth/Varies from Year to Year.– Specialized Experience in Serving Buy-Side Important: Knowledge of language, customs,

culture necessary in serving clients.

• A Concentrated Market.– States: 55 percent of Transactions Concentrated in Florida, California, Texas, and Arizona.– Countries: 54 percent of Transactions by Nationals from Canada China, India, Mexico, U.K.

• International Buyers are Diverse.– Motivations include investment, personal use (permanent or vacation), asset diversification.

• International Buyers Need Assistance.– U.S. real estate Practices Differ from Foreign Practices– Cultural as Well as Day-to-Day Differences Between U.S. and Other Countries.

• Sources of Clients– Generally Through Referral.– Websites Also a Source.