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ORLANDO, Fla. — Florida remained the top destination of foreign buyers purchasing U.S. residential real estate in 2018, with 19 percent of all foreign buyers who bought residential property in the United States. Florida Realtors® latest report, the 2018 Profile of International Residential Real Estate in Florida, finds that international sales accounted for $22.9 billion this year, down slightly (5 percent) from $24.2 billion in 2017.
The state’s rising property values coupled with a lack of for-sale inventory impacted the slower pace of international residential real estate activity, according to the report, which looked at Florida’s foreign buyer and seller transactions from August 2017 through July 2018.
In many areas, foreign buyers compete with U.S. buyers for the same properties, and solid U.S. employment growth boosted the domestic competition, the report found. In addition, mortgage rates remained 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)
Size of Florida’s international market, 2017-2018
- Foreign buyers purchased $22.9 billion of Florida’s existing detached single-family, townhomes and condominiums – a 5 percent year-to-year decline from $24.2 billion.
- In dollar value, foreign buyers made up 19 percent of the market (21 percent in 2017). Florida’s foreign buyers accounted for a larger fraction of the dollar volume of existing home sales compared to the national share of 8 percent.
- In number of sales, foreign buyers purchased 52,000 of Florida’s existing homes – a 15 percent year-to-year decrease (61,300 one year earlier).
- As a percentage of all sales, foreign buyers made up 13 percent in the latest report – 15 percent in the year before.
- Average cost of foreign-purchased home: $286,500 compared to $259,400 in 2017, or about a 10 percent increase.
- Overall, foreign buyers paid about 20 percent more than the median price of a Florida home.
Characteristics of Florida’s foreign buyers
- 68 percent primarily reside in another country; the rest are recent immigrants (less than two years in the U.S.) or visa holders.
- Latin American and Caribbean buyers accounted for 36 percent of Florida foreign buyers, followed by Canadians (22 percent), Europeans (19 percent) and Asians (11 percent).
- Most foreign buyers – 67 percent – made an all-cash purchase (72 percent in 2017).
- 71 percent purchased residential property for vacation, residential rental or both (68 percent in 2017).
- Slightly more than half of foreign buyers preferred townhouses or condominium (53 percent), while 43 percent purchased a detached single-family home, 3 percent purchased residential land and another 3 percent purchased other types of properties.
- Nearly half of foreign buyers purchased in a suburban or small town/rural area.
- 93 percent visited Florida at least once before purchasing a property.
Florida’s Realtors’ interaction with international clients
- In 2018, 41 percent of Florida’s Realtors worked with an international client; in 2017, however, 44 percent did.
- In 2018, 23 percent of Realtors reported an increase in their international business; in 2017, it was 26 percent.
- Only 30 percent of Florida’s Realtors reported an increase in their business that is international in the past five years (33 percent in 2017).
- Only 34 percent expect an increase in their international transactions in the next 12 months – it was 37 percent in 2017.
- 35 percent of respondents said that their client found Florida’s home prices less expensive than the prices in their home country – a decrease from 41 percent in 2017.
- 68 percent of foreign clients were referrals for a Realtor – personal or business contacts or former clients.
- 60 percent of Realtors reported no significant issues working with international clients.
- Of the Realtors surveyed, 75 percent were born in the United States, and 34 percent were fluent in a language other than English.
The 2018 Profile of International Residential Real Estate Activity in Florida report is based on an annual study done by the National Association of Realtors® (NAR) in cooperation with Florida Realtors and the Miami Association of Realtors®. A total of 7,368 Realtors responded to this year’s survey, conducted Aug. 6-Sept. 3, 2018.
[Florida Realtors® serves as the voice for real estate in Florida. It provides programs, services, continuing education, research and legislative representation to its 180,000 members in 52 boards/associations. Florida Realtors® Media Center website is available at https://media.floridarealtors.org.]