The National Association of REALTORS® is out with its latest international homebuyer study and it confirms that the appetite for U.S. real estate continues to flourish. The number of sales to foreign buyers rose once again over the past year, although international buyers are shifting their sights from luxury homes to less-pricey properties. Additionally, sales to recent immigrant foreigners are on the rise while non-resident buyers are cooling a bit.

NAR economists think the change in the price of homes international buyers are after may be due to overall higher home prices, along with a stronger U.S. dollar, which both cost foreign buyers more these days.

“Weaker economic growth throughout the world, devalued foreign currencies and financial market turbulence” all had an impact on foreign buyers over the past year, said Lawrence Yun, NAR’s chief economist.  “While these obstacles led to a cool down in sales from nonresident foreign buyers, the purchases by recent immigrant foreigners rose, resulting in the overall sales dollar volume still being the second highest since 2009.”

Foreign buyers purchased $102.6 billion of residential property in the U.S. between April 2015 and March 2016, according to NAR’s report. The number of properties purchased rose 2.8 percent to 214,885. The value of homes bought by foreigners was typically higher than the median price of all U.S. homes.

Experts say a slight drop in dollar volume is due to the types of properties purchased, and the locations of those properties. There are signs that foreign buyers have begun looking beyond higher-priced markets like San Francisco and New York to purchase properties in smaller, less-expensive cities in the Southeast and Midwest.

Chinese purchasers continued to outpace all others, with their dollar volume exceeding the total of the next four ranked countries combined. Their dollar volume of sales, at $27.3 billion, was three times as much as Canadian buyers, who were ranked second. Chinese buyers also bought the most expensive homes at a median price of $542,084.

Five states accounted for half of foreign buyer purchases, according to the NAR report: Florida, (22 percent), California (15 percent), Texas (10 percent), Arizona and New York (each at 4 percent).

Below is a market-by-market report from our local San Francisco Bay Area offices:

North Bay – There are currently 347 single-family dwellings available in Marin with 223 (39.1%) in contract and 73 condominiums available, with 79 (51.9%) in contract. As these figures indicate, the Previews market has slowed down considerably, while well priced lower priced homes are selling with multiple offers considerably over asking price, according to our Greenbrae manager. This week we have had a number of listings in our local office with under $1 million list prices, selling with 5 to 8 offers and going far above list. San Rafael office activity has been quiet over the holiday week, but agents are back now and busy with open houses, showing buyers and writing offers. This feels like a typical summer market, our manager says. This is a great time for buyers to be making offers as there is less competition and more inventory.  Our mortgage rates are still very low. Buyers should be taking advantage of this window of opportunity. As of today there are 109 residential properties available for buyers to purchase in San Rafael. The average list price is $1,113,500 and the average sq. ft. is 2,057. This represents about $527 per square foot. Our Santa Rosa Bicentennial office manager says the degree to which we have a seller’s market as ebbed. Many properties are getting just one offer even if they have delayed looking at offers for 5-7 days. Overall activity has picked up and buyers seem to be responding well to having a bit more room to negotiate. June sales were down 15.2% from June of last year. Overall year-to-date sales and inventory are down 9.4% from the same time last year.  June over June median price has risen 10%. Our Santa Rosa Mission office manager believes that until interest rates creep up, market conditions (too few sellers and too many buyers) will persist. Market is consistent and busy, with buyers and their agents fighting to get offers accepted. Our Southern Marin manager says the general market continues to flow with multiple offers on almost every property listed under $1 million, although these listings are fewer and fewer. From $1 to $3 million, the most desirable properties are still selling within 30 days. These properties are accurately priced, well located and in move in condition. Properties lacking these qualities are sitting on the market. The luxury market has slowed down, or leveled off is a more accurate description. After a flurry of activity in May and June for properties listed above $3 million, we have seen significantly more $3 plus million listings and a slower pace of sales. Our Southern Marin office participated in closings of $6,150,000; $5,000,000 and $4,000,000 in June.

San Francisco – Our Lakeside office manager believes there is a disconnect between the way that people “feel” about the market and the way that it appears to behave, which may signal a transition to a more stable market as opposed to the massively overweighted seller’s market we have experienced for the past many months.  Agents feel nervous because they are sometimes experiencing listings that are not sold within the first two weeks even though apparently well priced.  On the other hand, the number of sales has increased in the past few weeks even though we are now in the middle of summer with its vacation distractions.  Prices appear to be generally stable but some properties in less popular locations appear to be selling for less than they might have a couple of months ago. According to our Lombard office manager, a separation from single-family homes under $2m strength and a weakening market for condos and higher-end homes. Lots of price reductions in the higher-end. A widening caution amongst buyers. Best definition of the week from our Guest Speaker: “It is not a cooling of the market but a re-balancing.” Our Market Street office manager notes that well-priced turnkey properties generate good buzz and receive multiple offers, others are taking longer.   This is especially evident in the higher end (>$3M).    Open houses and broker tours continue to be well populated with interested parties, but those parties are slower to act.    Many listing agents are gauging buyer interest before setting their offer dates, if they set one at all.

SF Peninsula Our Burlingame manager says we seem to be experiencing a slight seasonal slowdown, but sales numbers are still strong. It’s been a pretty quiet week, according to our Menlo Park manager. It may be summer doldrums but the sense is that the market is plateauing. Less multiple offers, more price reductions, DOMs getting longer –  all point to a market becoming saturated with extraordinary price increases over the last few years and buyer exhaustion, she says. Our Palo Alto manager reports a slight momentum change. He said some sellers expect unrealistic prices but buyers are still motivated. It is definitely summer time in the Redwood City-San Carlos area. Activity has slowed down at what few open houses there are. Properties are staying on the market longer and there have been some price reductions. But properties that are priced right in a good location and show well are still getting multiple offers but fewer of them. Definitely an adjustment in the market. Time will tell where it is going. In San Mateo, it is still a bit slow-summer slowdown. Activity is slow in Woodside and Portola Valley as well.

East Bay – Going into July the Danville area market is strong, but definitely off last year’s pace.  Inventory is steady after climbing earlier in the year.  Multiple offers are common, but not at the blazing craziness of last year. This weekend there are 13 new listings coming on the market, our Oakland-Piedmont office reports.  It will be interesting to see if inventory goes up and how much it goes up after the long July 4th holiday. There are plenty of buyers out there looking to be in homes before school starts so we are looking to start making matches with homes and buyers. The market was slowing up a bit before the holiday and with all the activity in the office and with the listings it may be heating up a bit. Only time will tell.

Silicon Valley – Things have been surprisingly active in the Cupertino area considering the heat, vacations, and the holiday week, our local manager notes. The Previews luxury market has been improving as well. In Los Gatos, the active inventory is at the same level (88) as it was this time last year.  The average sales price Los Gatos is up 12% from the same time last year. Our San Jose Almaden manager says it seems the market is in a “summer slowdown” with a lower number of multiple offers and prices still higher than last year but not much higher (or in one case lower) than the previous month.  Inventory in Santa Clara County has been increasing as well although it is down from last week due to the 4th of July holiday.  Current inventory in SCC is at 1,681 SFR & C/T, down 50 from last week but up 352 from this time last year.  The median sales price for Almaden is $1,365,000, up 8.8% from last month and 9.2% from June 2015.  Inventory is at the highest level since July 2013.  The Blossom Valley median home price is $713,500, down 9.3% from last month and up 6.5% from June 2015.  Inventory is down 12 from last month.  Cambrian’s median home price is $1,000,000, just up 1.1% from last month but 12.4% from June last year.  Inventory is up 7% from last month.  Santa Teresa median home price is $773,000, up 3.5% from last month and 12.1% from last year.  Inventory for Santa Teresa is down 16.7%. The anticipated July 4th week slowdown just didn’t materialize in the Willow Glen market. Listing inventory remained steady at 90 plus units, and agents are expecting new inventory to increase after the July 4th week. The sales activity and open house traffic was much stronger than many had expected. We had several homes go into contract the past two weeks along with a few that were languishing on the market after recent price reductions they went into contract as well. The next two weeks post 4th of July should be interesting as we move into the end of summer Aug. market. The one metric that is most important is growth or reduction in new active listing inventory counts and consumption rates of that inventory.  In the Saratoga market the average sales price is up 10% from the same time last year.  Active inventory in the Saratoga market is 71 properties, which is 3% down from the same time last year. The higher-end market has slowed slightly, our manager reports.

South County – Traditionally, July and August are important months for in the South County as buyers prefer to get into in contract and close escrow before the start of the new school year.  With that said, Realtors working in the South County market (Morgan Hill and Gilroy) are seeing a flurry of activity in both listings and sales.   At this point, more homes are coming on the market, many of which are reasonably priced as the inventory seems to be growing.  With interest rates at record lows and more homes from which to select, the market has made a shift from a sellers’ market to a market more favorable to buyers.   Just several months ago, prices and low inventory kept buyers from securing a home in South County. That has changed dramatically.

Santa Cruz County – The number of single family homes has been increasing each month this year, with 248 new listings hitting the market in the month of June. The number of homes with an accepted contract has also increased each month with the only exception of April, which was just about equal to March. In June the number of accepted contracts peaked at 199, meanwhile the inventory of active homes on the market is hovering around 400, which is the highest it has been in 2016. About 50% of the active inventory of single family residences in Santa Cruz County is priced at $1 million or higher. Homes in this price range are seeing longer average days on market, and are not receiving multiple offers as often as more affordable listings. The number of listings in this price range that went into contract is lower than the more affordable range and has decreased in the month of June. Buyers are becoming more discretionary when spending this amount of money that they have been earlier this year.

Monterey Peninsula – Our local manager says the market has definitely felt a slow down on the sales side of the market with the Previews category feeling it the most. Buyers seem to be pulling back and not getting as anxious to jump on that new listing and are waiting to see what the response is to the property and price. Pacific Grove still continues to be the hot market under the $1 million price point. The recent European events seem to have rocked the markets but the aftershock seems to have subsided and there seems to be little effect to the local real estate market. The June gloom may have cast its shadow on the Monterey Peninsula with it still hanging on the coast. Surprisingly the visitors enjoy it as a respite from the heat, but the locals are getting a little tired of it. New listings continue at a consistent rate of about 50 per month and the same with sales with a nice equal supply and demand.

Market Watch is a bi-weekly column by Coldwell Banker San Francisco Bay Area president Mike James.  Click here to view past issues.