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Buyers from Brazil, China and Korea are among the foreigners snapping up bargain real estate in the U.S., according to The National Association of Realtors, or NAR, and more than half of them are paying in cash.
Mortgages are not as common in other countries as they are in the U.S., so foreign buyers are more accustomed to cash transactions. The NAR reports that 55 percent of overseas buyers paid in cash in 2009, compared with 8 percent of the overall market.
Another reason buyers are bringing cash to the table is that home prices are 30 percent to 40 percent off their peak and the weak dollar slashes the price even further for foreigners.
The majority of buyers seeking property in the U.S. are Canadians, but there's also been an influx of homebuyers from the United Kingdom, Australia, Russia and Japan. Popular U.S. hot spots include Miami, Las Vegas and Los Angeles.
A report on CNBC says overseas buyers spent $41 billion on U.S. residential real estate last year. U.S. buyers are still holding back, but part of that may be due to tight credit restrictions from mortgage lenders and uncertainty about jobs.
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Foreign buyers are paying cash because mortgage programs for them are few or non-existent.
If we want to stabilize the housing markets, let's figure out ways to make homeowners out of renters.
According to stats from the Greater Las Vegas Association of Realtors MLS system, 40% of all the single-family homes purchased in the past 12 months were acquired with cash. Investors make up a huge portion of the buying pool here, and will continue to do so for some time due to the tightening credit availability.