U.S. Residential Purchases byInternational Buyersy

June 2010

Total U.S. Residential Transactions Were $907 Billion, Twelve Months Ending in First Quarter 2010.Months Ending in First Quarter 2010. 

International Purchases Were 4 Percent.

U.S. Residential Market:  $907 Billion

Foreign Purchasers4.45%

Domestic Purchasers95.44%

Twenty Eight Percent of Realtors® Reported Having at Least One International Client in 2010.  

Eighteen Percent with Transaction Completed.

Realtors:  Foreign Client Percentages

32%

28%30%

35%

26%

23%

18%

13% 12%

18%

15%

20%

25%

13% 12%

0%

5%

10%

15%

0%

2007 2008 2009 2010

Realtors who had international clients Realtors who sold homes to international clientsRealtors who had international clients Realtors who sold homes to international clients

Previous Clients and Friends Provided 53 Percent of the Initial Contacts for Realtors® Serving the International g

Market.

Initial Client Contact

Domestic source13%

International source3%

Previous contacts/

Web13%

Previous contacts/ clients34%

Walk in Office/ Open house9%

Ad/ Yard signs

Other31%

Friends19%

Ad/ Yard signs8%

All Others1%

International Market Appears to be Relatively Concentrated:  the Number of Realtors® with a Large Number of International Clients is g

Limited.

11 or moreRealtors With International Clients                   ‐‐Number of Clients

129%

57%

6 to 106%

11 or more4%

29%

49%

2

317%

28%

Two Percent of Realtors® Obtaining 75 to 100 Percent of their Transactions from International Clients.  Three Percent Obtaining 51‐g

75 Percent. 

Percentage of Transactions by Realtors with International Clients

43%

40%

45%

50%

24%25%

30%

35%

11%15%

20%

25%

6% 5% 6%

3% 2%

0%

5%

10%

0% (N ) 1% 5% 6% 10% 11% 15% 16% 25% 26% 50% 51% 75% 76% 100%0% (None) 1% to 5% 6% to 10% 11% to 15% 16% to 25% 26% to 50% 51% to 75% 76% to 100%

Five Percent of Realtors® had Six or More Clients.

Percent of Realtors by Number of Clients Purchasing Property

6 to 1011 or more

2%

Z

3%2%

Zero34%2 to 5

30%

1 only31%31%

The International Client:  Type A, Type B, and Both Served by R lt ®Realtors®.

International Client Types Served by Realtors

21%

41%

38%

Type A: Primary residing in another country

Type B: Recent immigrants and short term visa holders

BothBoth

Why Clients Do Not Purchase.Thirty Four Percent Had Financing Problems.

Why Clients Did Not Purchase—in Addition to the 34 percent

35%Not find a property

Encountering Financing Problems

9%

13%

19%

Exposure to U.S. tax laws

Immigration laws 

Cost of property

3%

4%

7%

Insurance costs

Loss of home country benefits

Property taxes

18%

3%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Other

Insurance costs

International Purchasers:  Diversity of Areas and C t iCountries.

Purchases by Client Regions or Origin

Africa4%

Oceania1%

4%

Asia28%

North America35%

Europe26%

Latin America

6%

International Purchasers:  Diversity of Areas and C t iCountries.

Purchases by Client Nationality‐‐2010

23%

20%

25%

15%

10%9%

8%7%

5%

10%

%

3%2%

0%

5%

C d M i U i d Ki d Chi /H K G /F I di R i A i /B ilCanada Mexico United Kingdom China/Hong Kong Germany/France India Russia Argentina/Brazil

Canada‐‐Largest Buyer Group in the Past Three Years.  Share of Mexican Buyers is Growing.  Share of U.K. buyers has been y g y

Decreasing.

International Purchasers:  Country of Origin

25%

30%

15%

20%

2007

2008

5%

10%2008

2009

2010

0%

International Purchases—Pricing.International Purchases Pricing.

Purchase by Price Range

3%

7%

$750 K to $1 Million

Over $1 Million

11%

9%

6%

3%

$300 K to $400 K

$400 K to $500 K

$500 K to $750 K

$750 K to $1 Million

11%

10%

8%

$150 K to $200 K

$200 K to $250 K

$250 K to $300 K

18%

17%

0% 2%

$100 K or less

$100 K to $150 K

Pricing Over Time.Pricing Over Time.

Percent of International Sales by Price

45%

50%

30%

35%

40%

45%

2007

2008

10%

15%

20%

25% 2008

2009

2010

0%

5%

Under $200K $200K to $500K $500K to $1 Million Over $1 Million

Types of Properties Purchased.Types of Properties Purchased.

Type of Property Purchased

Commercial Property3%

Detached single‐

Condo/   Apartment23%

3%

family66%

Townhouse/ row house8%

MortgagesInternational Purchasers Frequently Pay Cash.

Property PaymentDon't know

1%

All cash (no mortgage financing)

With mortgage financing44%

55%

International Buyers are Split Between Use of the Property as a Vacation Home/Investment Home and p y /

as a Primary Residence.Intended Use

Vacation home for family and friends

22%22%

P i id

Residential rental property for

Primary residence50%

property for investment

14%

Both of the above14%

Price AnalysisPrice Analysis

Price distribution by residence purpose

8%11%Over $750 K

9%

25%

6%

11%

6%

14%

6%

$200 K to $250 K

$250 K to $300 K

$300 K to $500 K

$500 K to $750 K

14%

14%

14%

11%

23%

20%

9%

11%

$100 K or less

$100 K to $150 K

$150 K to $200 K

$200 K to $250 K

0% 5% 10% 15% 20% 25% 30%

Non‐primary residence    Median: $186,100Primary residence Median:$240,000Primary residence             Median:$240,000

International Buyers Purchase Property in a Variety of Types of AreasVariety of Types of Areas.

Location Characteristics

Resort area14%

Central city/ urban area27%

Small town/ rural area9%

Suburban area50%

Transactions by State.Transactions by State.

Percent of Transactions by State

25%

30%

15%

20%

2007

2008

10%

15% 2008

2009

2010

0%

5%

Fl id C lif i A i T G i N Y k N dFlorida California Arizona Texas Georgia New York Nevada

Realtors® Have Been Reporting Modest Increases in I t ti l Cli tInternational Clients.

How Has Percent of International Clients Changed?

70%

40%

50%

60%

10%

20%

30%

0%

Increased Stayed about the same Decreased Not applicable

Last Year Last 5 Years

The Value of the Dollar Appears to Impact I i l S lInternational Sales.

Effect of Change in Value of Dollar on International Sales

Not much21%

Very significant38%

Moderate41%

The Value of the Dollar Appears to Impact I t ti l S lInternational Sales.

U.S. Median Home Price:  Dollars and Euros

Price in $200

250

U.S. ed a o e ce: o a s a d u os

100

150

ce in

 1,000

Price in €

0

50

100

Pric

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

1,000 Euros 155.1 171.5 174.9 157.3 156.3 175.7 177.5 159.9 132.7 122.5 140.71 000 Dollars 143 6 153 1 165 0 178 8 195 4 219 6 221 9 219 0 198 1 172 5 173 1

0

1,000 Dollars 143.6 153.1 165.0 178.8 195.4 219.6 221.9 219.0 198.1 172.5 173.1

Security and Profitability:  Prominently Mentioned as Reasons for PurchasingReasons for Purchasing. 

Most Important Issue for Clients

A secure investment.

Other8%

18%

Profitable investment.

29%

Desirable location.45%