Summary
South Florida's depressed real estate market is still about six months from rock bottom, but now bargain hunters are out in force. At a recent conference, real estate brokers and lawyers agreed the sharpest declines in value and the highest spikes in foreclosures will hit once most of Miami's new condo units are built in late 2008 and into 2009. Still, several brokers are noticing that distressed properties are starting to sell, and buyers - especially foreign buyers - are already eyeing the market to make sure they don't miss a feeding frenzy for cheap real estate. The trifecta of the housing glut, the subprime crisis and the weak dollar has made South Florida real estate attractive again - but for a very different reason than in 2005.
Analysis
While many factors have contributed to the decline in home sales in Florida, an increase in foreign home buyers has help to decrease the amount of damage. Foreign buyers recognize U.S. real estate as a desirable, profitable and secure investment. Also, the weak U.S. dollar has made U.S., and particularly Florida, real estate investments even more attractive. The National Association of Realtors, in cooperation with the Florida Association of Realtors, conducted a survey in August, 2008 of Florida Realtors asking about their experiences in working with international clients. The survey included over 4,800 responses from Realtors who completed over 4,000 sales transactions involving a foreign buyer during the previous twelve months. More than half of the Realtors reported that they had worked with at least one international client in the past 12 months. The typical Realtor in this group worked with three international clients, and about one in five worked with six or more international clients in the past year. More than one quarter of the Realtors had one property sale to an international client while 15% reported two transactions within the past 12 months. Nearly one in five Florida Realtors completed at least three home sales transactions with international buyers. Slghtly more than 10% of Florida Realtors reported that international clients made up 50% percent or more of their business duing the year while half indicated that international clients accounted for roughly 25% of their business. One-third of Florida Realtor respondents also noted an increasing share of their business coming from international buyers over the past two years. Although international buyers of Florida homes and condominiums come from all over the world, buyers from a few regions and countries showed a high demand for Florida properties. Canadian buyers account for more than 25% of recent sales to foreign buyers. United Kingdom buyers accounted for 21% while the rest of Western Europe accounted for an additional 25%. Latin American buyers accounted for another 17% of recent real estate sales to international clients. While the Miami - Fort Lauderdale area was the most popular area for homes purchased by foreign buyers with 21% of such buyers while 11% purchased real estate in the Orlando area. Sarasota - Bradenton, Tampa Bay and Fort Myers - Naples rounded out the top six areas. In summary, Florida real estate and, in particular the Southwestern Florida areas of Sarasota - Bradenton and Fort Myers - Naples, are benefitting from an influx of international home buyers. This bodes well for future Florida real estate activity. It suggests that even as U.S. buyers may still be uncertain whether or not it is time to step up to the plate and buy a home or condomium in Florida, international clients are showing more confidence in an early Florida real estate market recovery. It further suggests that those who delay buying their dream home in Florida may soon find that they have to pay considerably more for the same property in just a few months.
