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Patricia Tan – Perspectives – International REAL Estate

Surprising Statistics

By Patricia Tan

The Research Division of the National Association of REALTORS recently published a report on the profile of international home buyers in Florida, and it revealed a few surprises.

Many of us already know that Florida is a major destination for foreign real estate buyers – those who purchase primary residences, second homes and investment properties here. About 25% of all foreign buyers choose to make their purchase in the Sunshine State, and Florida has consistently been in the top 3 states for international investment over recent years. Latest research reveals that, over the past year:

• 44,000 Florida properties have sold to international buyers. This represents 12% of Florida’s residential sales, down from 15% of our market in the preceding year.
• Those 44,000 sales represent $23.7 billion or 24% of the dollar volume of sales in our State. This is up from 19% in the preceding year.

So, foreigners are buying fewer homes, but they are spending more on the homes they do buy.

On average, overseas buyers spent $538,600 on a home last year, compared to $300,600 in the previous year. The median price for foreign buyers was also up from $209,600 to $297,300 and they tend to purchase more expensive homes than local buyers. The average local buyer price was $258,200 compared with $538,600 for foreign buyers. While Chinese buyers still represent a fairly small percentage of our market, they tend to favor more expensive homes, spending $1,064,800 on average.

The relative strength or weakness of the U.S. Dollar in world currency markets does have an impact on incoming investment. The economic and financial challenges of recent years have not been kind to the Canadian Dollar, Euro and British Pound. Canadians, Brits and citizens of the Euro Zone have traditionally shown great interest in Florida real estate. What impact has the stronger dollar had on their investment here, and where are the buyers coming from?

Canadians have always been a major player in our market as they purchase homes to escape the winter months, but their participation last year dropped. They fell from representing 32% of our overseas buyers to just 11%. Buyers from Europe also declined but by a lesser extent. Their lack of participation in the Florida real estate was made up for by Venezuelans who made up 18% of the market compared with only 3% in the previous year. South American buyers generally increased, with additional participation from Argentina, Brazil and Columbia in particular. Miami and Fort Lauderdale markets seemed to benefit most from the increased South American activity, while our own Gulf Coast market remained the top destination for Canadians.

International buyers will continue to play an important role in the Florida real estate market but the countries they come from may vary based upon relative currency strengths and other economic drivers.

The main reasons cited by foreigners as to why they chose NOT to buy a home in Florida were the increase in purchase price and running costs (combination of our rising market and their weakening currency), lack of available homes, and challenges of financing and immigration.

Statistics courtesy of National Association of Realtors.
Past 12 months generally covers the period July of previous year to June of current year. No survey was held in 2006. The 2005, 2007 & 2008 survey covered only non-resident foreign buyers.

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.