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 dropped, falling 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.
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.
“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 the National Association of Realtors. “However, the magnitude of the decline is quite striking, implying less confidence in owning a property in the U.S.”
High home prices are bad medicine for RNs looking to buy
Registered nurses earn a pretty penny in California, but they need many shiny dimes in order to buy the median-priced home in the Bay Area and Los Angeles.
The average registered nurse would need to work and save 10.2 years of pay in order to purchase a home in San Francisco, easily the longest work-to-purchase ratio among 12 major metros in the U.S., according to PropertyShark. Los Angeles had the second-largest work-to-purchase ratio at 7.1 years, followed close behind by third-place New York City (7.0 years).
Now, you can drill a few holes in the report — mortgage rates are near record-lows and a small down payment can open the door to ownership — but there are a couple of hard-to-overlook facts: home price increases outpaced wage growth for nurses in the Bay Area and Los Angeles, and saving money for a down payment takes time. In these cities, a lot of time.
The average nurse earned $129,000 in San Francisco in 2018, but the average home in the City by the Bay soared $136,000. With a current median-home price of $1.35 million, saving even 10% for the down payment would require more than a year’s salary.
Los Angeles-area home prices increased $41,000 to $711,000 in 2018, easily outpacing the wage gains of the average RN pay of about $100,000 in the region.
Now, home price increases have slowed during the past several months, but even a 5% annual gain makes homeownership tough based on a registered nurse’s salary.
Of course, RNs can always find more affordable homes in the suburbs of Los Angeles, such as the Inland Empire or Lancaster-Palmdale area, or buy a home with their spouse or even a friend. But the PropertyShark report definitely identifies the critical challenge of even the highly educated and well-paid in the Bay Area and Southern California.
Photo of RN with patient at Ohlone College/Flickr
Four CA cities among best 20 for families in U.S.
California is expensive, but there are some cities in the state that are great places to raise a family, according to a recent report.
Fremont and Irvine (above photo) finished as the second- and third-best cities for families in the U.S., behind only Overland, Kansas, according to WalletHub. The two cities were among the top for education, health and safety, and socioeconomics — and offsetting their hefty housing prices.
San Jose and San Diego finished at Nos. 16 and 18, respectively.
WalletHub compared more than 180 cities based on 47 key metrics important to family dynamics, such as the cost of housing, quality of local schools and health-care systems, and the opportunities for fun and recreation.
Of course, with any list of the best cities comes the bottom-of-the list places, also known as the worst places for families.
San Bernardino finished at No. 176 on the 182 cities listed, with Detroit taking the last spot.
Feature photo of homes in Santa Clarita by Feokistoff/Shutterstock