March 04, 2020 at 7:00am | Blair Schwisow
If recent headlines about the virus epidemic that began in China rattled nerves about the possible
effects on Boise home sales, they are almost certain to be unfounded. Reports of pending world trade
disruptions sometimes included speculation about the effect travel restrictions could have on home
purchases by foreign nationals—but the actual impact on Boise home sales is almost certain to be
minimal.

The reason is simple: for the better part of a year, all across the country, home sales to foreign
nationals have been growing less significant. Already by last July, CNBC was citing tightened currency
controls by the Chinese government as only one of the reasons for “a stunning drop in foreign demand for
American homes.” By August, USA Today put numbers to the trend: last year’s $13.4 billion in home
purchases reflected “a whopping 56%” decline from the prior year.

The U.S. was not the only country experiencing a contraction of Chinese economic activity. Last
July, The American Enterprise Institute sized up the statistics and concluded that state-owned Chinese
enterprises were responsible for the “plunge in investment and construction” around the globe. The
statistics dealing with “Chinese purchases benefitting Americans who hold desirable assets” (like Boise
luxury homes) were not specifically tracked by the AEI—but the actual effect on the high end of the
market was less than earth-shaking. AEI found “the average price of U.S. property bought by Chinese
buyers is $674,900”—a price tag well below the definition of Boise luxury properties.

As Statista.com pointed out, even considering all of the other factors unexpected or not—the most
common reason foreign buyers don’t buy U.S. real estate has been no different from the one American
prospects frequently cite: “could not find a property to purchase.” The lack of supply continues to keep a
lid on sales volumes. Even so, today’s extremely favorable home loan interest rates are coaxing more
buyers out from the sidelines.

Call me if you’d like more information about the latest outlook for this spring’s Boise market!

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