Florida remained the top destination of foreign buyers purchasing U.S. residential real estate in 2017, with 22% of all foreign buyers who bought residential property in the United States. Florida Realtors® latest report, the 2017 Profile of International Residential Real Estate Activity in Florida, finds that international sales hit $24.2 billion this year, up from $19.4 billion in 2016.
The economic environment created a mix of opportunities and challenges for Florida’s foreign buyers in 2016 and 2017, according to the report’s analysts. Latin American countries faced political and economic difficulties and weaker currencies in the wake of the collapse in oil prices. Meanwhile, economic growth strengthened in Canada and the Canadian dollar stabilized against the U.S. dollar.
House prices rose in the United States, including in Florida, but the appreciation was modest compared to home price appreciation in Canada. Amid these challenges and opportunities, overall foreign buyer purchases of Florida residential property increased: the share of buyers from Canada rose, the share of buyers from Latin America and Europe declined and the share of buyers from Asia and Africa remained unchanged.
The report is based on an annual study done by the National Association of Realtors® (NAR) in cooperation with Florida Realtors. It presents information relating to residential transactions with international clients of Florida’sRealtors as well as information on U.S. clients seeking to purchase property abroad during the 12-month period of August 2016-July 2017. In this report, the year 2017 refers to the 12-month period August 2016–July 2017, and the year 2016 refers to the period August 2015–July 2016. A total of 6,551 Realtors responded to this year’s survey, conducted Aug. 7-Sept. 9, 2017.
The survey considers only residential purchases in the state.
Report highlights
· Foreign purchases in the state increased to $24.2 billion, a $4.8 billion increase from 2016’s $19.4 billion.
· Foreign transactions accounted for 21% of Florida’s residential dollar volume of sales, a 2% increase year-to-year. Nationally, foreign buyers comprised 10% of the dollar volume of existing sales.
· Foreign buyers purchased 61,300 Florida properties (47,000 in 2016), which made up 15% of Florida’s residential market (12% in 2016). Nationally, foreign buyer residential purchases accounted for five% of existing-home sales.
· The median purchase price paid by foreign buyers increased to $259,400 ($252,500 in 2016), which was in line with the overall increase in Florida prices.
· The median price paid by foreign buyers was 18% higher than the median price paid by all Florida buyers.
Nationalities of Florida’s foreign residential buyers
· Latin American and Caribbean buyers accounted for the largest portion of Florida foreign buyers (34%), though this group made up 39% the previous year.
· Canadian buyers increased to 22% (19% in 2016).
· Other countries remained consistent year-to-year: The share of European buyers was unchanged at 23%; Asian buyers at 10%; and African buyers at one%.
· Most foreign buyers were concentrated in five metropolitan areas: Miami-Fort Lauderdale-West Palm Beach (53%); Orlando-Kissimmee-Sanford (11%); Tampa-St. Petersburg-Clearwater (nine%); Cape Coral-Fort Myers (six%); and North Point-Sarasota-Bradenton (five%).
Transaction details
· 72% of foreign buyers made an all-cash purchase.
· 68% of foreign buyers purchased residential property for vacation, residential rental or for both uses (72% in 2016); 49% bought a townhouse or condominium (52% in 2016).
· 35% (40% in 2016) purchased in a central city/urban area; 15% purchased in a resort area (14% in 2016).
· 93% of foreign buyers visited Florida at least once before purchasing a property (92% in 2016).
Florida clients searching properties abroad
· 17% of Florida’s Realtors said they had a client seeking to purchase property abroad, up from 14% in 2016.
· Top countries of interest from Florida residents looking elsewhere: Colombia, Costa Rica, Spain, Canada and the Dominican Republic.
· 75% were interested in residential property (79% in 2016).
· 75% intended to use the property for vacation, residential rental or both uses (84% in 2016).
Florida’s Realtors interaction with international clients
· While international business rose, fewer Realtors in Florida (44%) said they worked with an international client in 2017 (48% in 2016).
· 61% of Realtors said they did not have cultural and language problems.
· Personal contacts, previous clients and business contacts accounted for 72% of referrals or leads.
· An agent’s firm, franchise website or social media was the primary source of online leads, followed by other aggregator websites and realtor.com®.
· Respondents were evenly split about the outlook in the next 12 months: 43% expected the same or an increase in international clients, 42% expected a decrease, and 15% had no opinion.
· 56% expect foreign retirees to be potential clients.
