What International Buyers are Looking for in the Florida Market
ORLANDO, Fla. – Oct. 22, 2018 – Florida Realtors® has released its latest report on the state's foreign buyer and seller transactions, the 2018 Profile of International Residential Real Estate Activity. The one year-report – from August 2017 through July 2018 – found a small slowdown in international activity within the state, due mainly to a tight home inventory and rising property values.
In many areas, foreign buyers compete with U.S. buyers for the same properties, and solid U.S. employment growth boosted the domestic competition. In addition, mortgage rates remain relatively low compared to historic values, and the large supply of buyers, both foreign and domestic, had to compete for a relatively small number of homes for sale.
A stronger U.S. dollar also made Florida homes more expensive for foreign buyers from selected countries, notably Venezuela and Brazil. When asked about challenges faced by their international clients, Realtors surveyed said top objections included "Cost of property," "could not find property," and "exchange rate."
South Florida remains the preferred location for international business. While foreign buyers purchased property across the state, most foreign buyers were concentrated in five metropolitan areas:
- Miami-Fort Lauderdale-West Palm Beach (54 percent)
- Orlando-Kissimmee-Sanford (9 percent)
- Tampa-St. Petersburg-Clearwater (9 percent)
- North Point-Sarasota-Bradenton (5 percent)
- Cape Coral-Fort Myers (5 percent)
Here are highlights from the 2018 report:
Size of Foreign Buyer Residential Purchases
- Foreign buyers purchased $22.9 billion of Florida’s existing detached single-family, townhomes, and condominiums during the reference period of the 2018 survey, a five percent decline from the level during the previous 12-month period ($24.2 billion).
- The dollar volume of foreign buyer purchases accounted for 19 percent of Florida’s volume of sales in 2018 (21 percent in 2017). Florida’s foreign buyers account for a larger fraction of the dollar volume of existing home sales compared to the national share of eight percent.
- Measured in number of homes, foreign buyers purchased 52,000 existing homes (detached single-family, townhomes, and condominiums), a 15 percent decrease from the level reported during the previous 12-month period (61,300). This represents 13 percent of Florida’s residential market (15 percent in 2017). Florida’s foreign buyers account for a larger fraction of the number of homes sold compared to the national share of five percent.
- The 2018 median purchase price among foreign buyers increased to $286,500 ($259,400 in 2017), which is 20 percent more than the median price of Florida’s existing home sales, at $236,500.
Characteristics of Foreign Buyers
- The bulk of foreign buyers—68 percent— primarily reside in another country (Type A). The share of foreign buyers in Florida outweighs the 31 percent average from a national sample.
- Latin American and Caribbean buyers accounted for the largest fraction of Florida foreign buyers at 36 percent. The other major buyers of real estate properties were Canadians at 22 percent, Europeans at 19 percent, and Asians at 11 percent.
- While foreign buyers purchased property across the state, most foreign buyers were concentrated in five metropolitan areas: Miami-Fort Lauderdale-West Palm Beach (54 percent); Orlando-Kissimmee-Sanford (9 percent); Tampa-St. Petersburg-Clearwater (9 percent); North Point-Sarasota-Bradenton (5 percent); and Cape Coral-Fort Myers (5 percent).
- Most foreign buyers—67 percent—made an all-cash purchase (72 percent in 2017).
- Most foreign buyers—71 percent—purchased residential property for vacation, residential rental, or for both uses (68 percent in 2017). Nationally, 37 percent of all foreign buyers purchased for these purposes.
- Foreign buyers had a preference for townhouses or condominium—53 percent—while only 43 percent purchased a detached single-family home. Three percent purchased residential land and another three percent purchased other types of properties.
- Nearly half of foreign buyers purchased in a suburban or small town/rural area.
- Most foreign buyers—93 percent—visited Florida at least once before purchasing a property.
Interactional Client Transactions
- A lower fraction of Florida REALTORS®’ respondents—41 percent—worked with an international client in 2018 (44 percent in 2017). Nationally, 23 percent of REALTORS® worked with a foreign client.
- A lower fraction of respondents—23 percent— reported an increase in their business that is international in the past year (26 percent in 2017).
- A lower fraction of respondents—30 percent— reported an increase in their business that is international in the past five years (33 percent in 2017).
- A lower fraction of respondents—34 percent— expect an increase in their international transactions in the next 12 months (37 percent in 2017).
- The fraction of respondents who reported that their client found Florida’s home prices to be less expensive than the prices in their home country decreased to 35 percent (41 percent in 2017).
- “Cost of property”, “could not find property”, and “exchange rate” were the major reasons why international clients decided not to purchase.
- Sixty-eight percent of foreign clients were personal or business contacts or former clients.
- Most respondents—60 percent—reported no significant issues when working with international clients.
- Seventy-five percent of respondents were born in the United States, and 34 percent were fluent in a language other than English.