MIAMI & SOUTH FLORIDA REAL ESTATE MARKET

FACTS & TRENDS
Florida: Still #1 for International Buyers

Florida is by far the top state in the U.S for international real estate buyers, according to the just-released 2008 National Association of Realtors (NAR) Profile of International Home Buying Activity.

Nationally, this year’s survey indicates more than a quarter of Realtors in the U.S had at least one international client between May 2007 and May 2008. Considering South Florida’s position as an international gateway, this percentage would be much higher in the Greater Miami area.
According to the survey, more than fifty percent of those who did have international clients had successful home sales transactions with those customers. While two-thirds of Realtors reported their international clientele accounted for about the same level of business during the pas five years, 25 percent indicated their international business had increased. And even though the percentage of realtors serving foreign clients has decreased nationally, international transactions accounted for a median 16 percent of total transactions. Again this percentage would be significantly higher in terms of Southeast Florida real estate.

For the purposes of this survey, a foreign (or international) home buyer is defined as one who principally resides outside the U.S and is not classified as a foreign-born resident of the U.S. These buyers are not U.S. citizens, immigrants, foreign students, or workers on temporary visas.
Region and Country of Origin Similar to results from last year’s survey, most foreign home buyers were permanent residents in North America (Canada and Mexico) or Europe. While the share of European buyers slightly decreased by two percent from 2007 to 2008, North American foreign buyers increased nearly 10 percent during the same time period.

Six countries accounted for the majority of international purchasers: Canada, The United Kingdom, Mexico, China, India and Germany. The percentage of Canadian buyers doubled from 2007 to 2008. Canada and the U.K accounted for 36.1 percent of purchasers. Mexico dropped to third place in 2008 versus first place in 2007.

Types of Properties purchasedAccording to the study, foreign home buyers are buying the same type of properties as U.S buyers. Nationally, detached single-family homes were the most popular choice among international buyers, accounting for three quarters of purchase. Slightly less than 20 percent of foreigners bought a condominium/apartment, and six percent purchased a townhome. Together townhouses and condominiums accounted for 27 percent of international purchases compared to 12.6 percent in 2007. The percentage of international buyers choosing condos would be much higher in Southeast Florida.

According to the 2008 National Association of Realtors Profile of International Home Buying Activity, 25.4 percent of international buyers chose Florida. California ranked second at 8.9 percent, while Arizona and Texas ranked third and fourth at 8.7 percent and 6.8 percent respectively. As major U.S gateways with mild climates, Florida, California and Texas are expected to draw large numbers of international buyers. In regards to U.S. regions, foreign buyers predominantly purchased property in the South (46.8 percent) and the West (30.0 percent). The study covered the period from May 2007 to May 2008.

The level of international business differed significantly in the top four states. More than two-thirds of Florida Realtors indicated they had some foreign customers. In Arizona, nearly half of the Realtors had some foreign clients, but in California and Texas the percentage was much lower. Additionally, most of the foreign clientele in Florida and Arizona actually purchased property.

While the choice of state location and regional location differed by the buyers’ continent of country of origin, Florida was ranked first or second for most foreign regions or continents. Florida was first for buyers from North America, Europe, and Latin America and second for Asia.
Slightly more than 60 percent of properties purchased by Canadians were in Florida and Arizona. The majority of properties purchased by those from the United Kingdom and Germany were also in Florida. Chinese foreign purchases were primarily in California and Florida.

More than half of Mexican foreign transactions were for properties in Texas and California. Although the study did not include specific information about buyers in South Florida, Miami and its surrounding areas are known as the most international area in the United States , attracting numerous visitors, tourists, and real estate buyers worldwide. Strong markets include Russia, Brazil, France, Spain, Venezuela, and others.

U.S. Home Price and Method of PaymentThe median price foreign buyers paid for a home was $297,400, which is much greater than the national median sales price for all of 2007 -- $217,900 for an existing home of any type, or the highest monthly median price registered between May of 2007 and May of 2008 but slightly less than the median price paid by foreign buyers in the previous survey.

About half of foreign buyers paid $300,000 or less for their U.S. property . Similar to last year’ s survey results, 14 percent of foreign home buyers paid more than $750,000 for their U.S for their U.S. property.