The U.S. housing market is on the verge of being flooded with foreign buyers, and real estate brokers across the nation are bracing themselves for their return.
The U.S. has lifted travel restrictions on 33 countries that were put in place due to the COVID-19 pandemic, meaning vaccinated visitors from those territories can now visit freely.
Analysts say that many of those people are likely to want to invest in U.S. real estate, and that their return could generate tens of billions of dollars in sales over the coming months, CNBC reported.
Foreign buyers spend big bucks on U.S. homes. In 2018 they spent a combined $267 billion on American real estate, and in 2019 they spent $183 billion, according to data provided by the National Association of Realtors. However, foreign spending on U.S. real estate fell to just $107 million so far this year due to travel bans to and from many countries.
Restrictions meant buyers from places such as China, Brazil and India were prevented from traveling to the U.S., and those three nations traditionally account for a large chunk of the foreign sales volume. Citizens from those countries will now be able to enter the U.S. for the first time in 20 months. Brokerages believe many of them will have housing investment at the top of mind.
“This represents another upside in demand that just didn’t exist over the last two years,” Jonathan Miller, CEO of the real estate brokerage Miller Samuel, told CNBC. “It will be especially beneficial to the high-end and luxury market.”
Brokers believe new construction properties and higher-end homes will be in most demand.
“We’re expecting a flood of buyers across all our markets in the U.S.,” a spokesperson for Knight Frank told CNBC.
Brokers in New York have already reported increased interest from buyers in Europe, especially the U.K. and Germany. It’s believed Brazilian buyers will account for a large proportion of new foreign buyers in Florida, while in Los Angeles, high-rollers from the Middle East are expected to drive sales.
“The coastal cities will be the main beneficiaries,” Miller said.