Foreign Buying in US Real Estate Drops By $10 Billion, Significant for Art Market?

The Wall Street Journal has a story based on a new report from the National Association of Realtors that might give us a few clues about foreign spending in the US art market.

There’s no direct correlation between art and real estate or art and luxury real estate. But the two markets have had a tendency to trade in similar patterns. Anecdotally we know that there is a slowdown in buying in Manhattan and Miami at the very upper end of the range. There’s also been a big pull back in the art market above $10m.

Here the Journal gives a few clues, including the insight that Chinese buyers are again the big payers in the US market. Chinese account for 1/4 of the dollar volume sold to foreign buyers which was $27bn last year:

Purchases of U.S. residential real estate by foreigners who aren’t residents of the United States fell by $10 billion in the year ending March to $44 billion, the lowest level since 2013, according to a survey by the National Association of Realtors released Wednesday.

A strong U.S. dollar and weakening economies in Europe, South America and China along with rising U.S. home prices have hurt the purchasing power of foreign buyers. Tighter restrictions by the Chinese government on moving money out of the country also have made it more difficult for people there to buy U.S. homes. […]

While foreigners make up a tiny share of the U.S. housing market, they are critical to small, lucrative segments of the industry. Miami and Manhattan developers are relying on foreign buyers to help fill a swell of high-priced condos coming to market in the next couple of years. The high-end housing market in San Francisco and southern California also gets a significant boost from foreign purchasers.

Foreign Interest in U.S. Homes Cools (WSJ)