Here’s how much Canadians love to buy Florida homes

While we’ve been distracted by Canada’s Hollywood exports in the form of Ryan Gosling and Ryan Reynolds, investors from the North have been busy snapping up homes in the U.S.

Canadians retained their spot as the No. 2 international investors in U.S. property, with Florida coming in as the most popular state among this investor group, according to the 2017 National Association of Realtors’ International Activity in U.S. Residential Real Estate Report.

Despite the weak Canadian dollar, (one Canadian dollar will get you 79 U.S. cents) Canadians remain key homebuyers. Of the nearly $20 billion in U.S. real estate purchases, $7 billion were in Florida alone. Other popular states include Texas, California, New Jersey and Arizona.

Canadians have more than doubled their spending on U.S. properties. Between April 2016-March 2017, Canadians spent $19 billion on U.S. real estate, up from $8.9 billion the previous year.

In Canada, house prices rose by 10 percent in 2016, compared to 5 percent in the U.S. In particular, Vancouver housing prices rose sharply over the past year by 17 percent. The U.S. housing market saw modest price growth compared to Canada’s housing markets, which may have played a role in increased spending on U.S. properties.

If you are a Canadian investor interested in investing in Florida land or real estate, contact an expert member of the 9 Core Realty Team today!

 

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Cash is no longer king for Florida homebuyers

Cash deals are by no means dead, but they aren’t dominating the South Florida housing market the way they once did.

Sales without mortgages are happening less frequently as investors flee and traditional buyers gain easier access to financing, industry observers say.

In the second quarter, 46 percent of the home and condominium sales in Broward, Palm Beach and Miami-Dade counties went to cash buyers, down from 49 percent a year ago and from 62 percent in 2014, according to ATTOM Data Solutions, a research firm based in Irvine, Calif.

Cash sales peaked in the first quarter of 2011, when more than seven out of 10 deals didn’t involve a loan.

Investors descended on South Florida in 2011 and 2012 as the six-year housing bust was ending. With prices hitting bottom, bargain hunters with fistfuls of cash scooped up foreclosures and short sales for pennies on the dollar.

The competition was so fierce that some real estate agents were telling clients who needed mortgages that they had little hope of winning bidding wars for the homes. Sellers much prefer cash to financing because they know the deals are likely to close more quickly and with fewer hassles.

Today, though, with values rising and distressed homes in short supply, investors who remain in the market are all competing for the same few properties.

Housing analysts expected the Federal Reserve to increase rates this year. But instead, the Fed has only “tweaked” them, keeping the market favorable for financing.

A typical buyer with good credit can still secure a 30-year, fixed-rate mortgage of less than 4 percent. A 15-year mortgage can earn an interest rate in the 3.25 percent range..

In many cases, buyers are wealthy enough that they don’t require mortgages, but they’re choosing to get financing anyway because they can put their money to better use elsewhere.

Family homebuyers are realizing the benefits of mortgages, condo sales in South Florida are still predominantly all-cash due to financing restrictions.

Government-backed mortgage companies Fannie Mae and Freddie Mac won’t insure loans in buildings with too many investors or where the condo documents don’t sufficiently detail the amount of available reserves.

Those rules, put in place during the housing collapse, have been relaxed in recent years but are still a major factor in why most condo sales are for cash.

 

Amid U.S. real estate buying binge by foreign investors, Florida remains first choice

Foreign investment in U.S. residential real estate recently skyrocketed to a new high with nearly half of all foreign sales happening in Florida, California and Texas.

This year’s National Association of Realtors survey of international investing in U.S. real estate once again revealed that foreign buying is focused first and foremost on Florida, where 22 percent of such activities took place. The Sunshine State was followed by California and Texas (each at 12 percent), and then by New Jersey and Arizona (four percent apiece).

Florida was the most popular state for Canadian buyers, fueled by a sharp increase in sales dollar volume. Chinese buyers mostly chose California, while Texas was the preferred state for Mexican buyers.

Overall, 284,455 U.S. properties were bought by foreign buyers, up 32 percent from 2016. Purchases accounted for 10 percent of the dollar volume of existing-home sales, up from 8 percent last year.

NAR’s study found that between April 2016 and March 2017, foreign buyers and recent immigrants purchased $153 billion of residential property. That’s a 49 percent jump from $103 billion in 2016 and surpasses the $103.9 billion in purchases in 2015 as the new survey high.

“The political and economic uncertainty both here and abroad did not deter foreigners from exponentially ramping up their purchases of U.S. property over the past year,” NAR chief economist Lawrence Yun stated.

“While the strengthening of the U.S. dollar in relation to other currencies and steadfast home-price growth made buying a home more expensive in many areas, foreigners increasingly acted on their beliefs that the U.S. is a safe and secure place to live, work and invest.”

Yun attributed the rise in Canadian purchasing property in U.S. markets that remain more affordable than in their own country.

“Inventory shortages continue to drive up U.S. home values, but prices in five countries, including Canada, experienced even quicker appreciation,” said Yun.

Foreign buyers typically paid $302,290, which was a 9.0 percent increase from the median sales price in the 2016 survey ($277,380) and above the sales price of all existing homes sold during the same period ($235,792).

About 10 percent of foreign buyers paid over $1 million, and 44 percent of transactions were all-cash purchases, down from 50 percent in 2016.

If you are a foreign investor looking to purchase real estate in the United States, contact an expert member of the 9 Core Realty team.

Foreclosures Tell Story of Recovery, Recession

Foreclosures are falling fast in Southwest Florida and the rest of the state.

And more good news: Most of today’s foreclosures are on loans made before the bust, not loans made in recent years. That’s according to a recent report released by ATTOM Data Solutions.

The review of foreclosure activity for the first six months of 2017 shows steady declines in Florida, while eight states have seen such activity rise.

Those in this region eight or 10 years ago remember bleaker days, while newcomers may not grasp the depth of the region’s doldrums.

A refresher: monthly foreclosures in Lee County bottomed out in October 2005, when 127 were filed. That was near the end of the boom. They reached a high of 2,665 in October 2008, when the county represented one of the nation’s “foreclosure capitals.”

Experts say another real estate bust is unlikely

Fast-forward to today. The numbers pale in comparison, though they may be higher than readers might expect.

Filings from the first six months of the year: 1,632 in Lee, down 31 percent compared to the same period a year ago; 435 in Collier, down 32 percent; 392 in Charlotte, down 44 percent. The nation tallied 428,400, down almost 20 percent.

The latest data from ATTOM, curator of a large multi-sourced property database, shows a total of 428,400 properties nationwide with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the first half of the year. That’s down 20 percent from the same time a year ago.

Florida registered 41,854 foreclosure filings in the first six months of the year, down 33 percent from a year ago. Despite the drop in foreclosures over the years, the state is still tops in the nation, representing almost 10 percent of the country’s filings.

However, eight states (North Dakota, South Dakota, Mississippi, Oklahoma, Montana, Louisiana, Connecticut, New Jersey) and the District of Columbia posted a year-over-year increase in such activity.

Foreclosures in Lee lowest since 2006

The state and this region’s three largest counties are on track for the year to be below the 1 percent benchmark, meaning fewer than one in 100 properties with a foreclosure filing.

“Legacy loans,” those originating between 2004 and 2008, account for 56 percent of Florida’s foreclosure filings during the first six months of the year. In contrast, foreclosure rates on loans originating from 2009 to present are “extremely low.”