What’s Driving the Return of Foreign Buyers?
International buyers are returning to the U.S. real estate market—and San Diego is once again on their radar. During the past year, foreign purchases of existing homes jumped by 44%, totaling over $56 billion in transactions. California remains a top destination, with San Diego standing out thanks to its coastal beauty, stable economy, and international appeal.
For local buyers, this renewed foreign interest changes the landscape. Competition is rising, especially in high-end markets, and strategies must adapt. Whether you’re a first-time buyer or looking to upgrade, understanding this shift is key. Lending Bee provides the guidance and tools to help you navigate this evolving market and stay competitive.
Increase in cash transactions
A significant portion of foreign buyers—especially non-resident investors—make all-cash offers. In fact, recent data shows that 56% of non-resident foreign buyers purchased homes without financing. This is a major advantage in competitive markets like San Diego, where speed and certainty can often beat a higher offer that relies on mortgage approval.
Cash buyers also face fewer hurdles. With no need for lender approval or appraisals, they can close quickly, giving them an edge in bidding wars. For local buyers depending on financing, this creates a need for stronger pre-approval and faster execution—something Lending Bee helps every client achieve.
California’s lasting appeal
California continues to attract international investment due to its strong job market, educational institutions, lifestyle amenities, and global accessibility. San Diego, in particular, offers a unique combination of climate, coastline, and culture that makes it highly desirable.
International buyers often look to San Diego as a place to purchase vacation homes, rental investments, or future retirement properties. Neighborhoods such as La Jolla, Del Mar, Rancho Santa Fe, and Coronado remain magnets for foreign investors due to their luxury offerings and coastal views.
Rebound from pandemic-era slowdown
Foreign buyer activity had declined during the pandemic due to travel restrictions, economic uncertainty, and limited access to U.S. markets. Now, with international travel normalized and many global economies stabilizing, foreign buyers are back.
The recent 44% increase in foreign transactions marks the first year-over-year growth since 2017. San Diego real estate agents have seen a noticeable uptick in interest from overseas clients, especially those from China, Canada, and Mexico.
How Foreign Demand Affects Local Buyers
Intensified competition in key segments
Increased foreign demand puts pressure on already competitive markets. Buyers who rely on mortgages now face more cash-backed offers, particularly in luxury and coastal areas. This reduces negotiation leverage and can make it harder to secure a property.
Local buyers might find themselves outbid by international investors, even when offering the same price. This is especially true for properties over $1 million, where foreign activity is concentrated.
Limited inventory and rising prices
San Diego continues to struggle with low housing inventory. Foreign demand adds another layer of competition for limited listings. Even though overall market conditions are softening slightly, premium areas remain tight.
The influx of international buyers may accelerate price increases in specific neighborhoods. While this benefits sellers, it makes affordability more challenging for many local families and first-time buyers.
Uneven impact across neighborhoods
Not all parts of San Diego are equally affected. Foreign buyers tend to focus on well-known luxury markets near the coast. Inland communities and mid-range neighborhoods may not experience the same level of competition.
However, when high-end markets heat up, price pressure often spills over into nearby areas. This ripple effect can drive up demand in places like Carmel Valley, University City, and even parts of East County, where local buyers previously found more affordable options.
Changes in market behavior
Foreign buyer activity is influencing how sellers position their homes. There’s a growing emphasis on high-end finishes, turnkey condition, and digital accessibility through virtual tours and 3D walkthroughs. This trend increases buyer expectations, even in mid-range price points.
More properties are now being marketed with international appeal in mind. That may mean more aggressive pricing, tighter timelines, or fewer contingencies accepted—further challenging local buyers who rely on traditional financing.
How Local Buyers Can Stay Competitive
Strengthen your financing position
To compete with cash offers, local buyers must present the strongest financing package possible. Lending Bee helps clients get fully pre-underwritten, giving sellers confidence that the loan will close without delays.
Reducing contingencies and offering flexible terms can also make your offer more attractive. We work closely with clients and their real estate agents to fine-tune each offer for maximum impact.
Focus on the right neighborhoods
Not every area is saturated with foreign interest. By identifying neighborhoods with lower international activity, local buyers may find more room to negotiate and less aggressive bidding.
Lending Bee helps clients connect with knowledgeable agents who understand the hyperlocal dynamics of San Diego. That insight helps buyers target areas where they can compete effectively.
Be ready to act quickly
Speed is key in a market influenced by cash-rich investors. Delays in pre-approval or decision-making can cost you a home. Lending Bee ensures you’re ready to move as soon as the right property appears, with all documents and financing in place.
Consider homes with upside
Foreign buyers often seek move-in-ready, luxury properties. Local buyers can gain an edge by looking for homes that need light renovations or are priced below market value due to cosmetic issues. These homes face less competition and offer long-term potential.
Why Lending Bee Gives You the Advantage
Lending Bee offers more than just home loans—we deliver a complete mortgage strategy tailored to today’s competitive market. We understand the challenges local buyers face when competing with foreign investors, and we’re here to help you win.
Our team provides fast, reliable pre-approvals, expert guidance on financing options, and deep insight into San Diego’s evolving real estate trends. Whether you’re buying your first home or upgrading to a new one, Lending Bee ensures you’re prepared, confident, and empowered.