Foreign buyers spent 5.4 percent less on Florida homes, according to a new study by the Florida Realtors and the National Association of Realtors.
There was $22.9 billion spent on Florida homes by international buyers during the 12 months ended July 2018, down from $24.2 billion in the same period a year ago. In the most recent period, foreign buyers made up 19 percent of total home sales in the state, down from 21 percent in the prior period.
Several factors might have contributed to the decline. A strong dollar compared to the value of many foreign currencies, especially in Latin America, has made U.S. real estate more expensive for them, according to the Florida Realtors.
The Florida Realtors said the lack of for-sale inventory, especially for single-family homes, slowed the pace of home sales. Because of the strong domestic economy, local buyers were more competitive with foreign buyers, the Florida Realtors said.
In addition, the Financial Crimes Enforcement Network (FinCEN) issued a geographic targeting order in Miami-Dade County with closer scrutiny of all-cash home purchases, which is the most frequent way foreign buyers acquire homes.
In terms of transactions, foreign buyers purchased about 52,000 Florida homes in the 2018 study year, down from 61,300 the year before.
In the 2018 study year, 54 percent of the home purchases by foreign buyers occurred in South Florida, compared to 9 percent each in the Orlando and Tampa metro areas.
By country, the most foreign buyers in Florida came from Canada (22 percent) and Brazil (9 percent), with the United Kingdom, Venezuela, Colombia and China all at 5 percent. Venezuelan buyers peaked at 18 percent of sales in 2015 and have fallen sharply since as the economy in their country suffered.
In South Florida, 48 percent of foreign buyers were from Latin America, 20 percent were from Canada, 16 percent were from Europe and 10 percent were from Asia/Oceania. The biggest Latin American countries for South Florida buyers were Brazil, Colombia and Venezuela.
Chinese buyers are a major source of home sales on the U.S. West Coast, but they accounted for only 4 percent of sales in South Florida. However, half of the Chinese buyer transactions in Florida occurred in this region.
Some key numbers from the report:
- 20 percent – How much more foreign buyers paid than domestic buyers for the median price of a Florida home.
- 68 percent – Foreign buyers who continue to reside in another country.
- 67 percent – Foreign buyers who paid cash.
- 71 percent – Foreign buyers will use the home for vacation or residential rental.
- 41 percent – Of Florida Realtors who worked with an international client.
- 34 percent – Of Florida Realtors expect more international transactions in the next 12 months.
Original content SFBJ