Meet the typical Russian homebuyer in America: They spend more than other foreign buyers and tend to pay in cash
Alcynna Lloyd
Updated 5 min read
Luxury homebuyers.Getty Images
Russian buyers don't all cluster in Florida's "Little Moscow" — but in New York and Georgia, too.
They make up a small part of all foreign homebuyers in the US, but they spend more than any others.
The typical Russian buyer pays for their home in cash and uses it as a primary residence.
A tiny beach town north of Miami is home to a large concentration of Russians, but Little Moscow isn't the only place this wealthy set calls home.
As President Joe Biden targets Russia's elite and their families with sanctions that aim to minimize their financial footprint, pockets of Georgia and New York may also be worried about their assets.
Sprinkled throughout the US, Russians account for 0.8% of all foreign buyers who purchased US residential property from April 2015 through March 2021, the National Association of Realtors said. Although small in number, they spend more on their home purchases than any other foreign demographic, and most already hold US visas.
"Foreign buyers, including those from Russia, find the US an attractive destination because of the appeal of the property locations to the buyers and because of stable capital-appreciation returns," said Gay Cororaton, NAR's senior economist and director of housing and commercial research. She added that US home prices rose annually over the past 10 years.
Obviously, not all Russians in the US are wealthy, are oligarchs, or support Putin's attack on Ukraine.
Here's what the typical Russian homebuyer is like in the US.
Florida's "Little Moscow" may be all the rage, but it isn't the only city that Russian buyers call home.
Sunny Isles Beach, Miami.Getty Images
Since the collapse of the Soviet Union, wealthy Russians, hoping to protect or grow their assets, have poured billions of dollars into US real estate. It's become a popular homebuying destination not only for its hospitable climate and Ivy league schools but also for its real-estate investment opportunities.
While certain states, such as Florida and New York, are known as top homebuying destinations for Russian oligarchs, there are other hubs across the country where they have put down roots. NAR said that the top five home-purchasing destinations for Russian buyers from April 2015 through March 2021 were Florida (29%), Georgia (16%), New York (13%), California (8%), and Illinois (5%).
Russian buyers spend more on homes than any of their foreign peers.
A luxury home.Getty Images
An estimated 5,500 "ultra-high-net-worth Russian individuals" hold about $240 billion in real estate worldwide, Katherine Kallergis and Adam Farence wrote for The Real Deal. That's an average of $43 million per person.
The Moscow Times reported that the wealthiest Russian households boast net worths exceeding $100 million. So it's no surprise that those who can afford to relocate to the United States typically purchase expensive homes.
NAR said the median purchase price among Russian buyers between April 2015 and March 2021 was $325,000, just slightly higher than the $303,200 median purchase price among all US foreign buyers. But NAR added that the average purchase price among Russian buyers was $652,915, compared to $480,695 among all foreign buyers, which signaled that Russian buyers were paying more for their home purchases in markets that boasted heftier prices.
"This indicates that Russian foreign buyers tend to purchase more expensive properties — not necessarily high-end, but because they are purchasing in areas where properties are more expensive, like New York," Cororaton said.
Despite high prices, the typical Russian buyer pays for their home in cash.
People exchanging cash.Getty Images
US home prices have climbed because of a lack of housing inventory that has increased buyer competition. While many US buyers grapple with affordability woes, data from NAR shows that Russian buyers typically pay for their homes in cash.
"The fact that Russian foreign buyers are purchasing properties at the high end of the market or in more expensive locations indicates that Russian foreign buyers tend to be wealthier than other foreign buyers, so they have the capacity to make all-cash purchases," Cororaton said.
NAR said 51% of Russian purchases were in cash. It added that this was more likely of foreign buyers living abroad rather than in the US. For those living in the US, they were more likely to obtain mortgage financing.
Russian buyers tend to use their homes as their primary residence, rather than as a rental or investment property.
A family outside a luxury home.Getty Images
Most Russian buyers in the US purchased their properties for use as a primary residence, while 36% purchased properties to use for vacation or to rent, NAR said. In comparison, 40% of all US foreign buyers purchased their properties as vacation homes.
"One could conjecture that when it comes to purchasing vacation homes, Russian foreign buyers may be purchasing properties in Europe, as it is more convenient to travel to Europe due to proximity when compared to the United States," Cororaton said.
Because of the growing tensions stemming from the Russian-Ukrainian war, Russian oligarchs that own homes in London's high-end property market are now under pressure from the UK government. Margot Patrick and Eliot Brown wrote for The Wall Street Journal that as of March, "the UK government has all but told rich Russians they are no longer welcome." The pair said the move could devastate "the top slice of the real-estate market," which they said was already on edge amid the war in Europe and a stocks sell-off.
