Foreign buyers more influential over luxury market says Zillow

by Steve Randall01 Jun 2017
The impact of international buyers over the US housing market as a whole is not significant but it’s a different story at the top end.
Zillow’s quarterly survey of real estate experts and economists reveals that most believe the luxury homes market is majorly affected by the influence of foreign buyers.
Asked whether US cities should consider policy measures to curb foreign buyers, as seen in Toronto and Vancouver for example, the panel of experts did not think it was necessary. Most also believe that international buyers of US homes will be flat or decrease in the coming year.
Domestic issues are the main influence on home prices, the panel agreed.
"International buyers are popular scapegoats for rising real estate prices and shrinking inventory, but domestic factors have had a bigger influence on the housing market, much more so than demand from overseas," said Zillow Chief Economist Dr. Svenja Gudell.
"Older millennials are reaching prime homebuying age, increasing demand for housing, but we are still well behind historical norms when it comes to building new homes,” he explained. “The fact that economists and experts are revising their expectations upward for future home value growth is a sign that these trends will continue to exert upward pressure on prices going forward."
The expert panel expects a 4.8% rise in home prices for 2017.
"On the heels of last year's nearly 7% national home value appreciation rate, the prospect that prices will increase less than five percent overall this year might be dispiriting to some," said Terry Loebs, founder of Pulsenomics which carried out the survey for Zillow. "Yet, 4.8% is not only well above the historical average annual gain, it's the most optimistic projection for 2017 that we've seen from our expert panel over the past five years.

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