International investors sitting out the California home market

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That could mean less competition for local buyers who have been squeezed out of the Bay Area’s scorching housing market. But, some experts say, cash offers and eye-popping overbids from wealt…

Foreign buyers are snapping up fewer homes in California as the pandemic has slowed international travel from China and other parts of Asia, which accounts for at least a third of foreign real estate investment in the state.

Michael Repka, chief executive of DeLeon Realty, which caters to Chinese buyers seeking luxury homes in Silicon Valley, said with less international demand, the firm is focusing on house hunters who recently moved to the U.S. and are hungry for new properties amid the pandemic real estate boom. Between April 2021 and March 2022, 38% of foreign buyers in California were from Asia, 15% were from Canada, 12% were from Latin America and 27% were undetermined, according to the report.

International demand dipped even lower during the pandemic at the same time that a surge of U.S. buyers — many untethered from the office by remote work and boosted by historic-low mortgage rates — drove up home prices to record highs. Recently, however, prices have begun to cool across the state, which housing experts attribute to rising interest rates and lagging demand.

Even with the home prices starting to settle, some experts say wealthy foreign buyers could soon re-enter the market. Despite the drop in sales, the value of this year’s purchases increased 8.5% year-over-year to $59 billion, breaking a three-year streak of declines.

 

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