More International Buyers Coming To U.S.A.
By Patricia Tan
Recent Reports Show Significant Growth
I spend most of my time in Sarasota, where our real estate team lists and sells homes in Sarasota and Manatee Counties. A key factor that has contributed to our success over the years has been our focus on international buyers. Today, more than 70% of our business comes from transactions that involve someone from another country.
I also spend some of my time traveling around Florida, teaching other Realtors how to build their global business, and this means I have to understand the impact that international real estate activities have on our nation, state and local markets. To that end, I just reviewed two recent reports, and thought I would share some of the highlights with you.
The statistics quoted in this article come from the 2014 Profile of International Home Buying Activity report, published by the National Association of Realtors, and Buying In – An Analysis of International Homebuyers in Florida, published by Florida Tax Watch. Both reports were released in June this year.
These are some of the findings of the National Association of Realtors:
• Total international sales volume, across the nation, for the year April 2013 to March 2014 was approximately $92.2 billion, a 35 percent increase from the previous year’s $68.2 billion.
• This increased sales activity was partially due to growing affluence in China, Canada, India, Mexico, and the United Kingdom. Strength of the Chinese Yuan and British Pound particularly contributed to more activity from those countries.
• Florida was the state that attracted most international buyers, followed by California, Arizona, Texas, and New York. Together these states accounted for 55 percent of all international transactions.
• Canadians completed the most real estate transactions, but China accounted for the greatest sales volume. Typically Chinese buyers purchase more expensive homes.
• Less than 1% of all Realtors• each closed more than 11 transactions with foreigners in the year of the report.
• 59% of international clients found their Realtor• by a referral from family, friends or a trusted partner in their home country. Only 19% identified their Realtor• online.
To understand the impact overseas buyers have in Florida, the report by Florida Tax Watch provided this information:
• Since 2010 80% of all foreign purchases have been made with cash. This has provided a lot of liquidity to the market, which has benefited Florida homeowners, businesses, banks, and tax revenues.
• In Florida, homebuyers from Latin America and the Caribbean represented the largest group (32.1%), closely followed by Canada (29.6%) and Europe (26.6%)
• The top countries to buy in our state were Canada, the U.K., Venezuela, Brazil, Argentina, Germany, China, Columbia, France, Peru and Italy. Recently, purchases by British and German buyers have declined.
• Bradenton-Sarasota-Venice area ranks 4th most popular in the state with international buyers (6.95%), after Miami-Miami Beach (26.2%), Orlando-Kissimmee (11.2%) and Fort Lauderdale (10.05%)
• Canadians dominate in Bradenton-Sarasota-Venice, representing 51% of all international buyers. British and German buyers represent 13% and 12% respectively.
But what of the future?
Using the data and their own proprietary forecasting model, Florida Tax Watch predicts that between 2014 and 2016, Florida will see an estimated 60,369 international home sales, an average of 20,123 each year.
Forecasts are not certain and circumstances can change. How well Florida’s international real estate markets fares in the future will be influenced by many factors, including global events that have an effect on the whole world, and are beyond our direct control.
There are, however, some things we can strive to change, which will have a significant impact on our market. The National Association of Realtors report cited the two biggest reasons why foreigners did not purchase here – cost of ownership/taxes/insurance and lack of inventory. Politicians and builders please take note!
[1]Patricia Tan was born in England, and her career in international sales and marketing led her to live and work in many countries around the world before moving to Sarasota in 1997. Patricia is a Certified International Property Specialist (CIPS), Graduate Realtor Institute (GRI), and Transnational Referral Certified (TRC). She is involved in global activities of the Sarasota, Florida and National Association of Realtors, and currently serves as NAR President’s Liaison to U.K. Her real estate business operates from Coldwell Banker on St Armands Key, where her focus is to bring international buyers to the local market. She regularly makes marketing trips to Canada, Asia and Europe, to promote Florida’s Gulf Coast and the Sarasota area in particular. Patricia may be reached at 941-504-9232 or Pat@PatriciaTan.com [2].
Copyright © 2014 REAL Exclusive Magazine
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