Foreign investors, who rapaciously scooped up US real estate during the 2007-2009 recession, are backing away from the same markets they so eagerly jumped into a few years ago.
Real estate brokers say demand from international investors has flagged in locations that have been most attractive to overseas buyers - markets such as San Francisco, Phoenix, Las Vegas and Miami.
Many of those markets are back on solid footing after stumbling during the housing crisis. Property prices have risen, while the dollar - against the Indian rupee in particular, and to a lesser extent the Canadian dollar - has appreciated over the past year, despite hitting a speed bump in recent weeks.
As a result, real estate is no longer the bargain it once was for foreigners. That is discouraging new sales, while many foreigners who already own property are turning into sellers.
Kevin Kieffer, a broker who sells property in San Francisco for Keller Williams Realty, said in that area buying from foreigners has dropped by at least 30 per cent in the last few months.
"That is partly due to the fact that prices escalated so quickly in the San Francisco area," he said. "But some of my foreign clients have also mentioned the value of the dollar as another reason they decided not to buy." At the same time, domestic demand for real estate held steady, he said.
Calamitous declines in many of the nation's housing markets during the economic crisis had attracted droves of international investors seeking to cash in on a weak US dollar and rock-bottom property prices. Many were attracted to sunbelt markets that had been battered by the financial crisis.
The opposite trend is now gathering steam, and that will likely spell the end of the double-digit price gains seen recently in markets such as San Francisco and Miami, say people in the real estate business community.
International sales of US residential real estate dropped by US$14 billion to US$68.2 billion for the 12 months ending in March, the latest data available from the National Association of Realtors. Foreign purchases comprise 6.5 per cent of the US$1.05 trillion in total US existing-home sales.
Sluggish foreign economies and unfavourable exchange rates are reasons behind the decline, the NAR said. That hurts cities dominated by foreign buying but has little impact on large stretches of the country. The NAR recorded buying from 68 countries, and found Canada, China, Mexico, India and Britain accounted for about 53 per cent of the transactions in the year ending in March.
At 23 per cent, Canada took in the largest share. But real estate website Trulia.com  said Canada's share of foreign-based searches of its site fell 9 per cent year-over-year in the second quarter. The dollar is up more than 2 per cent versus the Canadian dollar in the last six months. That's a reversal from 2012, when the dollar fell 2.7 per cent against the Canadian dollar.
"Due to higher prices and a falling loonie [Canadian dollar], I decided to hold off on buying in Miami," said Norm Glick, a Canadian investor who owns property in Lake Worth, Florida. "Miami is no longer the bargain it was a mere year ago."
About 45 per cent of Miami's real estate is owned by foreigners, said Brigitte Lina Lombardi, an associate at Keller Williams Elite Properties, and home prices there gained over 14 per cent year-over-year in May.
"About 25 per cent of foreign investors who bought in Miami between 2009 and 2012 are not purchasing any more because of the increase in price," she said. "Now they are thinking to sell."