The downfall of the housing market has had a significant impact for sales on houses in Florida over the last decade. Right before the market crash, 7.1 million homes were sold across the country in 2005. But as the economy collapsed, home sales reduced dramatically by 31% over the course of the next five years. The decline in price was up to 21%. In Florida it was higher.
However, international buyers have become increasingly more interested in purchasing American homes during this period. Between 2008 and 2009, 31% of sales to non-residential foreigners were closed in Florida, according to a survey, Profile of International Home Buyers in Florida (Yun).
While the unstable economic atmosphere has inhibited domestic sales, foreigners have taken advantage of low home prices. The market drivers for international buyers when buying a house in Florida or a Miami condo are the desire to diversify assets, use as a vacation home, landlord investment opportunities, and the chance to invest in a place with secure property rights. Fifty-seven percent of those surveyed experienced an increased interest from international buyers.
Foreign buyers are more likely to buy existing residences in Florida than new ones, and they usually buy their homes in cash. Sixty percent of international buyers choose Florida because it is a desirable location, 23% buy a home because they believe it was a profitable investment, 12% reason that it will be a secure investment, with 5% stating other reasons. An overwhelming 84% of international buyers reported that Florida homes are less expensive than homes in their own country, according to the 2011 survey.
Forty-one percent of foreign buyers were from Canada and Mexico, but a sizeable 26% were from Latin America. Seven percent of the international buyers in Florida were from Venezuela. Venezuelans were most interested in buying in a city area at 65%, but 20% preferred a suburban area. Most plan to stay in their property for 6 months a year or less and prefer to live in the Miami-Fort Lauderdale-Miami Beach area.
Yun, L., Ph.D., Bishop, P., Ph.D., Chung, K., Smith, J., Ph.D. (2011). Profile of International Home Buyers in Florida. National Association of REALTORS.