- $59 billion worth of U.S. residential properties were purchased by international buyers from April 2021–March 2022, representing an increase of 8.5% from the previous year.
- The average purchase price for international buyers was $598,200, and the median purchase price was $366,100, which were the highest ever recorded by NAR.
- The top five countries of origin by U.S. residential sales dollar volume were China, Canada, India, Mexico, and Brazil. The top U.S. destinations for foreign buyers were Florida, California, Texas, Arizona, New York, and North Carolina.
The latest data shows that Latin American buyers were the biggest group of buyers, with a market share of 23%, up from 19% in the previous period. It’s worth noting that Mexico is included in the Latin America/Caribbean region, despite being geographically part of North America. The second largest group of buyers were Asian buyers, with a 22% share, which remained unchanged from the previous period. Meanwhile, Canadians and Europeans made up 11% each. Compared to the previous period, Canadian buyers accounted for a larger fraction, increasing from 8% to 11%.
From April 2021 to March 2022, Canada was the top country of origin among foreign buyers in terms of the number of homes purchased, accounting for 11% of foreign buyer home purchases (up from 8% in the prior period). Mexico ranked second with an 8% share (up from 7%), while China remained in third place with a 6% share. India followed with a 5% share, and Brazil saw a two-percentage-point gain in its market share, accounting for 3%. The remaining countries in the top 10 for foreign buyer home purchases were Colombia, Germany, the United Kingdom, France, and Japan.
The Benefits of a Builder/Capital Partner Joint Venture for Developing Single-Family Homes
Executive Summary:
Developing single-family homes is a complex process that involves a lot of investment and risks. Buying unimproved land and developing it is a traditional method of developing single-family homes. However, a builder/capital partner joint venture is a better alternative for developing single-family homes because it offers several advantages such as sharing risk and expertise, leveraging capital, and accelerating the development process.
Introduction:
Developing single-family homes is a challenging process that requires a lot of resources such as capital, land, expertise, and time. One of the traditional methods of developing single-family homes is to buy unimproved land and then develop it into single-family attached or detached units. However, this method comes with several risks, including land entitlement, construction delays, and cost overruns. On the other hand, a builder/capital partner joint venture is a better alternative for developing single-family homes. This paper will explore the benefits of a builder/capital partner joint venture in developing single-family homes.
Sharing Risk and Expertise:
Developing single-family homes involves a lot of risks, including construction delays, cost overruns, and market risks. By forming a joint venture with an experienced builder and an institutional capital partner, developers can mitigate these risks by sharing them with their partners. Both parties share the financial risk and expertise, with the builder providing the construction expertise and the capital partner providing the necessary funding. In this way, both parties can leverage their strengths and reduce their weaknesses, leading to a better outcome.
Leveraging Capital:
Developing single-family homes requires a significant amount of capital, and developers often face challenges in accessing capital. A builder/capital partner joint venture is an excellent way for developers to leverage capital from institutional investors. Institutional investors, such as pension funds and private equity firms, have a lot of capital that they are looking to invest. By forming a joint venture with them, developers can access this capital and use it to fund their projects. This way, developers can reduce their reliance on debt financing, which can be more expensive and riskier.
Accelerating the Development Process:
Developing single-family homes can be a lengthy process, often taking years from land acquisition to project completion. By forming a joint venture with an experienced builder and an institutional capital partner, developers can accelerate the development process. The builder brings construction expertise, which can help speed up the building process, while the capital partner provides funding, which can help reduce the time spent on raising capital. In this way, developers can complete their projects faster and get them to the market sooner.
Conclusion:
In conclusion, a builder/capital partner joint venture is a better alternative for developing single-family homes compared to buying unimproved but fully entitled land to build single-family attached or detached units within a particular submarket. The benefits of a joint venture include sharing risk and expertise, leveraging capital, and accelerating the development process. These benefits can help developers mitigate risks, access capital, and complete their projects faster.