Foreign interests in the American real estate market have dropped recently. A report released this week by the National Association of Realtors indicated that foreigners are buying U.S. residential real estate at the lowest levels since 2013.
High-end markets such as Miami, San Francisco, and New York have relied on wealthy off-shore buyers to sell the increasing number of luxury condos and homes on the market. Not only are fewer foreigners buying real estate, but they are also spending less money on average per property. However the most common reason given for not purchasing a U.S. property was an inability to find one that fit the buyer's criteria. Therefore, as more upper-class condos enter the market in the coming years, foreign revenues could start increasing again.
Chinese residents are the largest non-U.S. buyers of American properties. As a result of the Chinese government regulating the flow of money out of the country, investments from China dropped $1.6 billion this year. U.K. buyers are also a contributor to American domestic real estate purchases, and the weakening pound sterling could decrease future investments.
This report is an example of one downside a global economic power faces when its currency strengthens. Even though domestic real-estate prices haven't been rising drastically, it is simply costing foreigners more money to buy property in the U.S.