International Home Buyers Impact on Florida Real Estate

International home buyers make up a large part of the Real Estate market in Sarasota.  

Listing prices have increased and inventory has decreased.

The following information is provided from a report on International Florida Home Buyers taken by the National Association of REALTORS®, in cooperation with the Florida REALTORS® association.

10% of Home Buyers from the United Kingdom choose Sarasota, FL

United Kingdom —Top Destination for Home Buyers Orlando-Kissimmee 29%
Bradenton-Sarasota-Venice
10% Tampa-St. Petersburg-Clearwater 10%
Miami-Fort Lauderdale-Miami Beach
10% Cape Coral-Fort Myers 10%
Other
31%

The international real estate market, defined as non-resident foreigners purchasing residential real estate in this country, is important to Florida. NAR’s Profile of International Home Buying Activity, 2011 identified the total U.S. market of existing home sales to non-resident foreigners at $41 Billion, with an additional $41 Billion of sales each year to recent immigrants and resident foreigners. Total residential sales in Florida for 2010 were estimated at approximately $48.8 Billion, and sales to foreigners were estimated at $12.7 billion. Approximately 25 percent of total Florida residential sales are estimated to have been to foreigners in the 12 months ending June 2011; the estimate is subject to plus or minus 5 percent error. The data and computations for this estimate are in Appendix 1.

This report provides insights into the international segment of Florida’s residential real estate market. Nationally, the level of international sales is relatively small—in the neighborhood of 3 percent of all transactions; however, for Florida international sales are a major portion of the market:

• Approximately 25 percent of all sales in Florida are to foreigners.
• Nearly all sales are all-cash.
• Foreign purchasers buy upper end homes – median approximately $174,700.
• Foreign purchasers bought because of good values in U.S. housing market, helped by the weaker dollar.
• Canadians lead, with the UK now less important. Brazil and Venezuela have become more important.

In recent years as a result of the Great Recession, financial crises, foreclosures, and troubled consumer finances the U.S. housing market has suffered both volume and price declines. 

 Total U.S. existing home sales declined nationally by 31 percent from the peak in 2005 to 2010. The corresponding price decline over that time period was 21 percent. Regional and month-to-month experiences were significantly worse in a number of cases.

 Single family sales in Florida fell from 248,600 in 2005 to 170,800 in 2010, a decline of 31 percent. According to reports from Florida REALTORS®, prices declined from to $235,100 to $136,500, a decline of 42 percent.

The demand for U.S. homes by foreigners is different from the overall U.S. market. All real estate is local, and the important domestic market drivers– jobs, consumer confidence, family formation, and economic growth—have had major negative impacts on existing home sales in domestic transactions. International sales of U.S. homes to foreigners, however, have different market drivers—perceptions of value relative to foreign comps, the desire to diversify assets, potential vacation use, rental opportunities, and an interest in placing assets in areas with well-defined and secure property rights.

NAR’s Profile of International Home Buying Activity, 2011 indicates that the international market has been growing slightly in recent years, which is significant in view of overall market declines in U.S. residential sales of existing homes. There is rising affluence throughout the world, and clients come from a wide variety of countries to purchase U.S. real estate. Four states—Arizona, California, Florida, and Texas accounted for 58 percent of total U.S. residential home sales to non-resident foreigners in the 2009/2010 time frame. Florida accounted for 31 percent of total U.S. residential home sales to non-resident foreigners in the same time period.

International home buyers view Florida Real Estate as a safe place to put their money and will continue to buy into the future.

To view the full 47 page report on International Home Buyers just send me an e-mail asking me for it and I will send it to you. Feel free to check out all homes for sale in the Sarasota area here