Trulia released a report Tuesday morning that shows foreign interest in the U.S. real estate market appears to be waning, except in the Washington metro area.
Based on all home searches on its site between April 1 and June 30, the real estate Web site found that foreign searches fell nearly 10 percent year-over-year. Falling home prices had attracted interest from abroad, particularly Canada, the United Kingdom, Germany and Australia. Many investors had viewed American real estate as a safer haven for their money than other investment options.
Now that home prices are on the rise, that interest has cooled, except in the Washington area, which saw a 4.4 percent increase year-over-year.
“D.C. has a different type of attraction for people abroad looking for homes than most other metros do,” said Trulia economist Jed Kolko. “Since D.C. didn’t have the big declines [in price] and is not having now the big rebounds [in price], D.C. got neither the big interest from foreigners nor the more recent drop off. It’s yet another way in which the D.C. market — both the housing market and the economy overall — is often different from the rest of the country and often more stable.”
Kolko noted that the Washington metro area, despite its international community — the embassies, the World Bank, the IMF — doesn’t have as high a share of housing searches as regions such as Miami, Los Angeles and other Florida cities. Most people searching from abroad tend to look for warm weather escapes and well-priced investment properties.
The top 10 foreign searches in the Washington metro area were from, in descending order, the United Kingdom, Canada, Germany, India, France, Italy, Japan, South Korea, China and Australia.
“The fact that South Korea is higher than China, for D.C., that’s unusual,” said Kolko who noted that Virginia’s large South Korean immigrant community no doubt drove that search pattern.
He also pointed out that the only big country that had the Washington area among its top five searches was Nigeria. The region ranked fifth after New York, Los Angeles, Chicago and Atlanta for that African country.
The top Zip codes with the highest share of foreign searches were, in descending order, 20007 (Georgetown/Glover Park), 20016 (Tenleytown/Spring Valley), 20037 (West End/Foggy Bottom), 22102 (McLean, outside Beltway), 22101 (McLean, inside Beltway), 20817 (Bethesda, western Maryland), 22041 (Bailey’s Crossroads), 20008 (Cleveland Park/Woodley Park/Kalorma), 20024 (Southwest Waterfront) and 20816 (Bethesda, southwestern section Maryland).
Kolko noted that the top three Zip codes searched all had universities — Georgetown University, American University and George Washington University — which tends to attract a lot of foreign interest.