International buyers – foreign citizens who legally enter the United States to purchase a home – are making up a growing share of business for real estate practitioners, according to new research by the NATIONAL ASSOCIATION OF REALTORS®.

NAR’s 2007 Profile of International Home Buying Activity shows that a quarter of REALTORS® report more international business in 2006 than five years ago.  Nearly one in five respondents sold a home to an international client in the past year, and one-third say they believe foreign retirees are an increasingly important market in the United States.

The research explored the characteristics of second-home purchases in the United States made by international clients.  Here are six of the top findings:

• Stronger preference for condominiums and apartments. Twenty-two percent of international buyers purchased condominiums/apartments, versus 12 percent of U.S. buyers.
• More pay in cash.  Twenty-eight percent of foreign buyers bought their houses with cash, compared to 8 percent of U.S. buyers.
• Purchase pricier homes.  The median sales price of homes purchased by international buyers was $299,500, which is significantly higher than the U.S. median of $221,900 during the same period.
• Homes used for vacation, investment.  Forty-seven percent of all international buyers purchased homes exclusively for vacation, while 22 percent were motivated primarily by investment.  International homeowners spent an average of 4.2 months of the year in their U.S. property in 2006. 
• Buyers from Mexico most prevalent.  A third of all international buyers are from Europe, but buyers from Asia and North America (outside the United States) each represent about one-fourth of the total market.  Sixteen percent of all international buyers are from Latin America.  By individual country, most buyers come from Mexico (13 percent), the United Kingdom (12 percent) and Canada (11 percent).
• Florida leads the pack.  Fifty-two percent of all sales in 2006 were concentrated in three states: (Florida (26 percent), California (16 percent), and Texas (10 percent).

New real estate license requirement take effect on October 1^st:  Beginning October 1^st, AB 2429 requires all new applicants for the real estate salesperson exam to show proof of having completed a three-semester, or quarter-unit equivalent, college-level course in real estate principles, real estate practice and one additional course set by the California Department of Real Estate.

SB 819, a bill authored by Senator Dennis Hollingsworth was signed by Governor Schwarzenegger.  The bill provides Local Agency Formation Commissions (LAFCOs) with greater authority to foster effective and efficient local services.

LAFCOs are charged with reviewing proposals for both the formation of new cities and special districts and changes to the organization of existing cities and special districts.

SB 819 specifically allows LAFCOs to approve the consolidation of special districts not formed under the same principle act.  In certain situations, consolidation is the most viable alternative for local districts that are struggling financially or operationally to provide efficient services to the public.  SB 819 significantly expands the number of districts that have the option to consolidate, should the need arise.

The bill also gives LAFCOs the authority to initiate a proposal for the formation of new special districts after a consolidation.  Previously, LAFCOs were not able to initiate these proposals, meaning that the proposal needed to come from one of the consolidating district.  SB 819 removes this extra step, which added time, cost, and uncertainty to the process.

Richard Tegley is a REALTOR® and a Director of the CALIFORNIA ASSOCIATION OF REALTORS® and the NATIONAL ASSOCIATION OF REALTORS®. Richard can be reached at (951) 533-9340 or email Tegley@surfcity.net

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