SEATTLE, May 31, 2017 /PRNewswire/ -- International
buyers of residential real estate in the U.S. don't have a
significant impact on the overall housing market. They are more
influential at the top end of the market, according to the 2017 Q2
Zillow Home Price Expectations Surveyi.
The quarterly survey, sponsored by Zillow and conducted by
Pulsenomics LLC, asked more than 100 housing experts and economists
about the impact of international buyers on the U.S. real estate
market. Overall, international buyers have a modest effect on
inventory and home values, according to the panelists. At the high
end of the market, though, the respondents said international
buyers have a major impact on home values.
Since the housing crash, housing affordability has been a
significant issue for many Americans. Rapidly increasing rents had
the dual effect of financially incentivizing homeownership and
making it harder to save for a down payment. At the same time,
lagging new construction and high negative equity rates have kept
inventory low, pushing up home values and making it harder to find
an affordable home. Increased activity from international buyers of
U.S. real estate has also fueled concerns about affordability.
Most of the panelists surveyed expect that international buying
activity will decrease or stay at the same level in the coming
year, signaling that outside influences aren't likely to be the
most significant driver of the U.S. housing market over the next
year.
Expectations for overall home price growth are stronger now than
they were a year ago. A year ago, panelists predicted that home
prices would rise 3.4 percent in 2017. Now, they expect to see a
4.8 percent increase. Their forecasts for home price growth in 2018
are also more optimistic now compared to last year.
"International buyers are popular scapegoats for rising real
estate prices and shrinking inventory, but domestic factors have
had a bigger influence on the housing market, much more so than
demand from overseas," said Zillow Chief Economist Dr. Svenja Gudell. "Older millennials are reaching
prime homebuying age, increasing demand for housing, but we are
still well behind historical norms when it comes to building new
homes. The fact that economists and experts are revising their
expectations upward for future home value growth is a sign that
these trends will continue to exert upward pressure on prices going
forward."
Some cities with expensive housing markets – including
Vancouver, Canada, Paris, and Sydney - have introduced policies in attempts
to limit international home buying activity, However, most
panelists agreed these measures are unlikely to affect housing
affordability, or may even be counterproductive. Only about 20
percent of respondents think these policies are an effective
response to improve housing affordability.
"On the heels of last year's nearly seven percent national home
value appreciation rate, the prospect that prices will increase
less than five percent overall this year might be dispiriting to
some," said Pulsenomics founder Terry
Loebs. "Yet, 4.8 percent is not only well above the
historical average annual gain, it's the most optimistic projection
for 2017 that we've seen from our expert panel over the past five
years. Although most pessimistic experts still expect a sharp
slowdown to commence in 2018, even this group anticipates home
values to increase an average of nearly four percent this year.
Given these projections, it's a pretty safe bet that U.S. home
equity growth will exceed $1 trillion
for the sixth consecutive year, and continue to buttress consumer
confidence and household spending in 2017, especially if more of
today's renters can afford the transition to homeownership."
Zillow
Zillow® is the leading real estate and rental
marketplace dedicated to empowering consumers with data,
inspiration and knowledge around the place they call home, and
connecting them with the best local professionals who can help. In
addition, Zillow operates an industry-leading economics and
analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of
economists and data analysts produce extensive housing data and
research covering more than 450 markets at Zillow Real Estate
Research. Zillow also sponsors the quarterly Zillow Home Price
Expectations Survey, which asks more than 100 leading economists,
real estate experts and investment and market strategists to
predict the path of the Zillow Home Value Index over the next five
years. Launched in 2006, Zillow is owned and operated by Zillow
Group (NASDAQ:Z and ZG), and headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
Pulsenomics is a registered trademark of Pulsenomics LLC
i This edition of the Zillow® Home Price Expectations
Survey surveyed 106 experts between April 24
and May 8, 2017. The survey was conducted by Pulsenomics LLC
on behalf of Zillow, Inc. and asked the experts about their
expectations for the housing market.
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visit:http://www.prnewswire.com/news-releases/foreign-buyers-influencing-home-luxury-market-300465726.html
SOURCE Zillow, Inc.