1. International Demand for U.S. Housing 2016 International Housing Association Meeting February 17, 2016, Washington, D.C. Scholastica (Gay) D. Cororaton Research Economist National Association of REALTORS®

2. Outline of Presentation Size of purchases of foreign buyers in the U.S. Characteristics and preferences of foreign buyers Impact of global slowdown on foreign demand for U.S. properties

3. Foreign Buyers: About Four Percent of U.S. Existing Home Sales

4. Sales to Foreign Buyers : About 200,000 Sales Per Year* *Purchases made from April of previous year through March of current year.

5. Resident buyers (Type A): 52 Percent Non-resident buyers (Type B): 48 Percent

6. U.S. Existing Homes Became More Affordable to Foreign Buyers

7. Foreign Buyers: Typically More Upscale than Domestic Buyers

8. Non-resident Buyers Typically Make an All-Cash Purchase Source: RCI Survey

9. Foreign Buyers Come From Across the Globe, Led by LatAm and Asian Buyers

10. Top Buyers: China, Canada, Mexico, India, and U.K.

11. Top Five Foreign Buyers

12. Most Currencies Weakened Against the Dollar Except Chinese Yuan

13. Chinese Foreign Buyers Typically Purchased at Higher Price Range

14. Top Destinations: Florida, California, Texas, and Arizona

15. Foreign Buyers: A Key Market in Florida

16. Canadian Buyers Prefer FL, AZ, HI, CA

17. Chinese Buyers Concentrated in the West Coast and Key Cities

18. Indian Buyers Are More Dispersed

19. Mexican Buyers Prefer TX, CA

20. U.K. Buyers Tend to Purchase in FL, AZ, and Northeast

21. Intended Use By Type of Foreign Buyer

22. Foreign Buyers Tend to Purchase in Urbanized Areas

23. Detached Single-family: 61 Percent vs. 80 Percent Nationally

24. Headwinds Facing Non-resident Foreign Buyers in 2016 – Stronger dollar – Higher U.S house prices – Slower economic growth, especially in oil- producing countries: China, Canada, Mexico, Brazil, Venezuela, Russia – Tighter monitoring of dollar outflows in China

25. Currencies Have Lost Value Against the U.S. Dollar

26. Median Price of a U.S. Existing Home Is Back to Pre-Housing Crisis Level

27. Slowdown in Economic Growth

28. Tighter Monitoring of Capital Outflows

29. New Regulations Governing Individual Foreign Exchange Transactions Circular of the State Administration of Foreign Exchange (SAFE) on Further Improving the Administration of Individual Foreign Exchange – individual foreign exchange monitoring system launched Jan 1, 2016 – Individuals not allowed to evade purchase quota ($50,000 per year per person) ; those individuals who borrow another individual’s quota will be put on watch list for the current year and two consecutive years – Banks to report any quota evasion within 20 days – Banks to assign technicians to the individual foreign exchange business monitoring system

30. Conclusions Foreign buyers represent a niche market Foreign buyers come from across the globe and purchase in many states, but transactions still concentrated in a few countries and in a few states Slowdown in growth, slump in oil prices, strong dollar, and tighter monitoring of capital flows in China likely to ease housing demand by foreign buyers in 2016-2017.

31. International Demand for U.S. Housing 2016 International Housing Association Meeting February 17, 2016, Washington, D.C.