2016 Florida International Residential Real Estate Activity

2016 Florida International Residential Real Estate Activity

Florida remained the top destination of foreign buyers purchasing U.S. residential properties in 2016, accounting for 22 percent of all foreign buyers who purchased residential property in the United States. 2 However, slower economic growth in many countries, the appreciation of the dollar against a number of currencies, and strong price growth in multiple areas due to limited housing inventory combined to make conditions more difficult for foreign buyers purchasing in the United States and in Florida. Residential Properties Purchased by Foreign Buyers Foreign buyer purchases of Florida residential properties decreased to $19.4 billion ($23.7 billion in 2015). This accounted for 19 percent of Florida’s residential dollar volume of sales (24 percent in 2015). Nationally, foreign buyers comprised seven percent of the dollar volume of existing home sales.  Foreign buyers purchased 47,000 residential properties (44,000 in 2015), which made up 12 percent of Florida’s residential market (12 percent in 2015). Nationally, foreign buyer residential purchases accounted for four percent of existing-home sales. The dollar volume of purchases decreased even as the number of purchases increased because the average price of foreign buyer purchases declined to $412,000 in 2016 compared to $539,000 in 2015. The median purchase price also decreased to $253,000 from $297,000. In part, this is due to the smaller fraction of Latin American buyers who tend to purchase properties at the higher price range.  The appreciation of the dollar affected the decision to purchase, with 58 percent of respondents reporting the effect was “significant” (52 percent in 2015).  A higher fraction of respondents, 30 percent, reported that Florida’s real estate prices were more expensive than prices in the buyer’s home country (22 percent in 2015).  Latin America and Caribbean buyers accounted for the largest fraction of Florida foreign buyers at 39 percent, although they comprised a smaller share than in 2015 (56 percent).  Florida’s foreign buyers come from many countries, and the top five countries of origin by dollar volume were Canada ($3.0B), Brazil ($2.8B), Venezuela ($1.5B), the United Kingdom ($1.4B), and Argentina ($1.4B). Altogether, buyers from these countries accounted for 52 percent of total dollar volume and 48 percent of foreign buyer purchases.  Foreign buyers purchased property across Florida, but foreign buyers were concentrated in Miami-Fort Lauderdale-West Palm Beach MSA (52 percent), Orlando Kissimmee-Sanford MSA (12 percent), and Tampa-St. Petersburg-Clearwater MSA (eight percent).  Most foreign buyers, 72 percent, made an all-cash purchase.  Most foreign buyers, 72 percent, purchased residential property for vacation, residential rental, or for both uses. Nationally, 44 percent of all foreign buyers purchased for these purposes.  Just over half (52 percent) of foreign buyers bought a townhouse or condominium. Nationally, only 29 percent of foreign buyers purchased these types of properties.  Florida’s foreign buyers are increasingly located in a central city/urban area. Forty percent of foreign buyers chose a central city or urban location, up from 25 percent eight years ago. Meanwhile, 14 percent purchased in a resort area, down from 33 percent in 2008.  Forty-two percent expected a decrease in foreign clients in the next 12 months.

 

In the 12-month period ending in July 2016, foreign buyers purchased $19.4 billion of Florida residential real estate, an 18 percent decrease from the $23.7 billion in purchases during the 12-month period ending in June 2015.  The dollar volume of foreign buyer purchases accounted for 19 percent of Florida’s existing home sales, a decrease from the 24 percent share in 2015. Nationally, the dollar volume of such sales accounted for seven percent of the U.S. dollar volume of existing home sales.

 

Foreign buyers purchased 47,000 residential properties, a seven percent increase from the 44,000 properties purchased in the 12-month period ending in June 2015. The number of foreign buyer purchases held at 12 percent of Florida’s existing home sales. Nationally, foreign buyer residential property purchases accounted for four percent of U.S. total existing home sales.

 

 

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