Fewer foreigners buying homes in Texas
Sales of Texas homes to international buyers have fallen dramatically in the past year, according to information released by the National Association of Realtors.
Foreign buyers spent 42 percent less on homes in Texas between April 2017 and March 2018 compared to the previous year — a $7.8 billion drop. The decrease outstrips a 21 percent dip in international home sales nationwide.
Some say changes in policy are partially blame.
Ivan Arjona, a Houston real estate agent with RE/MAX said that many Mexicans are holding off on buying a second home in the United States. “Right now, they’re in a limbo kind of thing with the new president,” he said. “They don’t know what’s going to happen or what’s not going to happen.”
“A lot of the activity in Texas is driven by foreign homebuyers in Mexico,” explained Paul Bishop, vice president of research at the National Association of Realtors. “In fact, of all of the foreign investment in Mexico, Texas accounts for about 38 percent. So in a large part, Mexico drives the changes in Texas for year over year.”
Mexicans spent 29 percent less on homes in the United States compared to the previous year, which could explain a large part of the dip.
“It’s much easier to say, ‘Let’s wait and see what happens,’” Bishop said. “What may happen in this country in terms of policy and how welcoming policy may be to foreign buyers?”
Only 5 percent of respondents to a survey by the National Association of Realtors believed international home buyer activity will increase in the next year. The association’s chief economist, Lawrence Yun, attributes that to confusion and ambiguity surrounding recent policy changes.
Economic instability in Venezuela and Brazil has made it more difficult for people from those countries to get loans in the United States. “So the Venezuelans are out,” Arjona said. “The Brazilians are out.”
The dip could also be related to the broader market — Houston’s real estate market recently hit an all-time high in home sales, meaning foreign buyers face more competition.
“It’s just harder to find a home,” Bishop said.
Michele Marano, a real estate agent with Realty Associates who specializes in representing homebuyers and sellers who work for the energy industry, believes the energy market is also playing a part.
“Things are kind of flat,” she said. “When oil dropped, you saw a lot of people leaving, and there was a transition of companies… That fluctuation and movement has tapered off.”