Fewer foreigners are buying homes in CA, U.S.
California is second-largest destination for foreign buyers
Foreign buyers, especially those from China, are pulling back on buying homes in the U.S., as the global economy slows.
Foreign buyers bought $77.9 billion of homes from April 2018 through March 2019, a staggering 36% decline from the $121 billion during the same period a year ago, according to the National Association of Realtors. And the number of homes they purchased dropped from 266,800 to 183,100 from the previous period.
Even how much foreign buyers paid for homes declined, from a median price of $290,400 to $280,600, according to the annual report.
‘Implying less confidence in owning a property in the U.S.’
Fewer foreigners buying homes generates a mixed message for the housing market in California. Historically, foreigners have bumped up home prices, which is bad for Californians looking to buy but helps homeowners looking to sell.
California is the second-leading destination for foreign buyers at 12%, followed by Florida at 20%.
A number of factors could be holding back foreign buyers. From a cooling global economy — which slowed to 3.6% in 2018 and is expected to decline to 3.3% this year — to the immigration rhetoric, and even the trade war standoff with China. Plus, as home prices increase, affordability is also a worry.
“A confluence of many factors — slower economic growth abroad, tighter capital controls in China, a stronger U.S. dollar and a low inventory of homes for sale — contributed to the pullback of foreign buyers,” says Lawrence Yun, chief economist for NAR. “However, the magnitude of the decline is quite striking, implying less confidence in owning a property in the U.S.”
CalHFA helps a record 11,000 homeowners
Saving for a down payment is often the biggest hurdle to homeownership. But the California Housing Finance Agency (CalHFA) is helping a record number of home-dreamers become homeowners.
The state agency assisted more than 11,000 low-and moderate-income residents buy their first home in fiscal year 2018-19, easily exceeding the previous record of about 8,400 two decades ago.
CalHFA’s assistance efforts to help homeowners have increased six straight years.
“With the governor’s current focus on housing, I’m very pleased that we’ve been able to help so many people find a home they can afford,” says CalHFA executive director Tia Boatman Patterson. “Providing sustainable and affordable homeownership opportunities is a significant piece of our continuing mission.”
CalHFA has several programs to help homeowners. And the state agency’s income limits are often higher than many expect, from about $128,000 in rural counties to $228,300 in the Bay Area.
CalHFA will debut two programs in the coming months. CalHFA will assist Native Americans to buy homes on tribal lands and helping residents purchase a rural home with up to 100% financing in a partnership with the U.S. Department of Agriculture.
About the author
Ron Trujillo, an award-winning business journalist-turned-public relations executive, is the editor-owner of CalHomeNews and can be reached at email@example.com.
Half a million-dollar gain for San Jose home-sellers
Four of the five cities where home-sellers enjoyed the largest gains during the second quarter were in California.
San Jose home-sellers netted, on average, about $517,000, the largest profit in the nation, according to ATTOM Data Solutions. The gain is based on the purchase price vs. the sale price.
San Francisco home-sellers had the second-largest gain at $376,000, with Santa Rosa at $225,000 and Los Angeles at $224,500. Boulder, Colo., ended the California domination at almost $195,000, the fifth-largest profit in the nation.
Oxnard and San Diego finished in seventh- and ninth-place, respectively.
Nationally, the average home-seller had an average gain of $67,500, the largest quarterly gain during the past three years.
Photo of San Jose skyline by Stellamc/Shutterstock
Rents soar by $100-plus in first half in some CA cities
Pity renters in Redondo Beach, Sunnyvale, Burbank and San Mateo — their housing costs have dramatically increased during the first half of the year.
Redondo Beach renters had the largest boost in average rent, rising $195 to $2,515, according to RENTCafe.
Sunnyvale had the second-highest rent increase at $158 to $3,057. Burbank and San Mateo rents jumped $138 and $131, respectively.
San Francisco, as always, was the most expensive market for renters in the state at $3,697, followed by Sunnyvale and then San Jose at $2,789. Los Angeles was the fourth-priciest at $2,508.
Highland had the biggest percentage gain in the state at 11.2%, followed by Roseville, a suburb of Sacramento, at 9.5%.
The nation’s average rent increased 3.2%, or $45, to $1,465.
You can check out more rental rates of U.S. and California cities in the RENTCafe report.
Photo of Foster City apartments by Sundry Photography/Shutterstock