Foreign buyers are spending more, buying less in California

More foreigners are discovering America, again. Well, the nation’s real estate to be more specific.

Foreign investors bought a combined $59 billion of homes in the United States from April 2021 through March 2022, an 8.5% increase from the previous year and ending a three-year skid of slumping sales.

Record-high prices – from Portland, Maine, to Portland, Ore. – are the primary reason along with some pent-up demand from those holding off during the peak of the COVID pandemic.

Foreign buyers bought 98,600 homes nationwide during the latest period, a 7.9% decline from the same period a year ago and the lowest since 2009, when the National Association of Realtors started tracking out-of-country buyer data.


So, it’s more about price than volume. The combined $59 billion paid is the most since $121 billion in 2018 – and far from the record $153 billion in 2017.

“For the second year in a row, restrictions and general caution tied to international travel during the pandemic slowed home buying by wealthier foreign buyers,” says Lawrence Yun, chief economist for the NAR. “Even so, domestic home buying demand was exceptional and, therefore, boosted homes nationally.”

International buyers are a fraction of buyers nationwide, less than 2%. But they comprise a larger percentage in some states, including California. Almost 60% of the foreign buyers were recent immigrants or hold work-related visas.

National Association of Realtors chief economist Lawrence Yun

China buyers purchased $6.1 billion in homes nationwide, the most of any country followed by Canada at $5.5 billion. The average Chinese buyer paid more than $1 million for their home in the U.S., with almost one in three of those homes being sold in California. India, Mexico and Brazil finished in third through fifth place in the foreign race for properties in the U.S.

However, Canada had the largest percentage of foreign buyer home sales at 11%, followed by Mexico at 8% and China at 6%. Canadiens often buy second homes in warmer states, such as Arizona and Florida. Canadiens comprised 20%-plus of foreign buyer home sales in the U.S. just a decade ago, before cash-flush Chinese started to dominate the market.


Florida remained the top destination for foreign buyers, accounting for 24% of such sales. It’s the 14th consecutive year the sunshine state was the leading destination for foreign buyers.

California was a distant second place at 11%, down from 14% in 2021 and a record 17% in 2013. Texas finished in third place at 8%, followed by Arizona (7%), and New York and North Carolina, each at 4%.

Again, while only a fraction of sales, foreign buyers are an important piece of the residential real estate market. About 45% of foreign buyers paid cash for their homes, making them less mortgage rate sensitive.

“Due to rising interest rates, overall home sales will decline in the U.S. this year,” Yun says. “Foreign buyers, however, are likely to step up purchases, as those making all-cash offers will be immune from changes in rates. In addition, international flights have increased in recent months with the lifting of pandemic-related travel restrictions.”

Cover illustration by Akulamatiau/Adobe Stock

More than half of homes for sale in the Sacramento-Roseville market had prices cut in July, according to Redfin.

Home values dip in July and sellers are readjusting

Home values are declining, as affordability becomes a major concern for many consumers faced with the highest mortgage rates in more than a decade.

And five of the eight cities with the largest value declines were in California from June to July, including a 4.5% drop in San Jose, the largest in the nation, according to Zillow.

A boost in available homes and a drop in potential buyers have caused values to slide across the country – and in California.

San Francisco, Sacramento, San Diego and Riverside had at least 2% drops in home values during the past month. Of course, home prices in these cities are up 50% or more during the past couple of years.

Values fall from June to July
  • San Jose: -4.5%
  • San Francisco: -2.8%
  • Sacramento: -2.5%
  • San Diego: -2.5%
  • Riverside: -2.4%
  • Los Angeles: -0.4%
Source: Zillow


Despite the recent decline, California Association of Realtors chief economist Jordan Levine says home prices should increase almost 10% in 2022 compared to the previous year. But many housing experts say the gains may have already happened in the first few months of the year, and prices will either be stagnant or slip in the coming months.

Thirty of the 50 largest cities had a decline in values between June and July. Phoenix, Austin, Denver, Portland and Salt Lake City – popular destinations for Californians looking to escape the state were among the top 10.

Home sellers in many of these areas are adjusting their list prices, including seven of 10 sellers in Boise, easily the largest percentage of reduced prices nationwide in July, according to Redfin.

But six California cities had at least 40% of homes on the market priced lower in July. Sacramento had the largest percentage of repriced homes at 52% in the state, the sixth-highest in the nation. San Diego was close behind at 50% followed by Stockton at 47%, Oakland (41.2%), San Jose (40.9%) and Fresno (40.5%).

It’s the second consecutive month where many homeowners in California looking to sell have cut prices.

ATTOM Data Solutions: Riverside and San Bernardino counties have 14,500 vacant homes, the most in California.

Vacant homes increase but remain near record low

Zombies are rising. But no need to worry, for now.

A closely watched, albeit an inside baseball type of report, has determined about 1.3 million homes nationwide were vacant during the current quarter, including 71,546 in California, a 6.4% increase compared to third-quarter 2021. 

The national figure is also up slightly compared to a year ago, according to ATTOM Data Solutions.

It’s far from the sky is falling and the zombies are rising scenario. The percentage of zombie homes – those left vacant – remains near a historic low. But it’s certainly worth watching as government eviction moratoriums end, says Rick Sharga, executive vice president of ATTOM.

“Vacancy rates continue to be low as investors and prospective homebuyers compete for limited inventory,” Sharga says. “And the number of zombie properties should continue to increase slowly as foreclosure activity climbed back from historically low levels due to government intervention.”


California’s 71,546 so-called “zombie” properties compare to 67,222 homes a year ago, and includes about 16,430 homes in pre-foreclosure – the first steps before a lender takes back a house. 

But the chance of a flood of foreclosed homes landing on the market remains slim, especially since many homeowners have a ton of equity, thanks to the run-up in prices during the past couple of years during the COVID pandemic.

Bottom line: This ain’t another 2008.

However, there are a couple of housing markets where zombie properties are rising, including Sacramento-Roseville – about 7,700 zombie houses compared to 5,579 a year ago – and San Francisco, up 30% (or about 1,330 homes) from a year ago.

Zombies (vacant homes) among us
  • Riverside-San Bernardino: 14,536
  • Los Angeles: 12,666
  • Sacramento-Riverside: 7,764
  • San Francisco: 5,794
  • San Diego: 5,236
  • Bakersfield: 1,800
  • Fresno: 1,779
  • San Jose: 1,601
Source: ATTOM Data Solutions