Foreign purchases of Florida real estate grow to $24B

Florida remained the top destination of foreign buyers purchasing U.S. residential real estate in 2017, with 22 percent of all foreign buyers who bought residential property in the United States. Florida Realtors latest report, the 2017 Profile of International Residential Real Estate Activity in Florida, finds that international sales hit $24.2 billion this year, up from $19.4 billion in 2016.

The economic environment created a mix of opportunities and challenges for Florida’s foreign buyers in 2016 and 2017, according to the report’s analysts. Latin American countries faced political and economic difficulties and weaker currencies in the wake of the collapse in oil prices. Meanwhile, economic growth strengthened in Canada and the Canadian dollar stabilized against the U.S. dollar.

House prices rose in the United States, including in Florida, but the appreciation was modest compared to home price appreciation in Canada. Amid these challenges and opportunities, overall foreign buyer purchases of Florida residential property increased: the share of buyers from Canada rose, the share of buyers from Latin America and Europe declined and the share of buyers from Asia and Africa remained unchanged.

The report is based on an annual study done by the National Association of Realtors (NAR) in cooperation with Florida Realtors. It presents information relating to residential transactions with international clients of Florida’s Realtors as well as information on U.S. clients seeking to purchase property abroad during the 12-month period of August 2016-July 2017. In this report, the year 2017 refers to the 12-month period August 2016–July 2017, and the year 2016 refers to the period August 2015–July 2016. A total of 6,551 Realtors responded to this year’s survey, conducted Aug. 7-Sept. 9, 2017.

The survey considers only residential purchases in the state.

Report highlights

  • Foreign purchases in the state increased to $24.2 billion, a $4.8 billion increase from 2016’s $19.4 billion.
  • Foreign transactions accounted for 21 percent of Florida’s residential dollar volume of sales, a 2 percent increase year-to-year. Nationally, foreign buyers comprised 10 percent of the dollar volume of existing sales.
  • Foreign buyers purchased 61,300 Florida properties (47,000 in 2016), which made up 15 percent of Florida’s residential market (12 percent in 2016). Nationally, foreign buyer residential purchases accounted for five percent of existing-home sales.
  • The median purchase price paid by foreign buyers increased to $259,400 ($252,500 in 2016), which was in line with the overall increase in Florida prices.
  • The median price paid by foreign buyers was 18 percent higher than the median price paid by all Florida buyers.

Nationalities of Florida’s foreign residential buyers

  • Latin American and Caribbean buyers accounted for the largest portion of Florida foreign buyers (34 percent), though this group made up 39 percent the previous year.
  • Canadian buyers increased to 22 percent (19 percent in 2016).
  • Other countries remained consistent year-to-year: The share of European buyers was unchanged at 23 percent; Asian buyers at 10 percent; and African buyers at one percent.
  • Most foreign buyers were concentrated in five metropolitan areas: Miami-Fort Lauderdale-West Palm Beach (53 percent); Orlando-Kissimmee-Sanford (11 percent); Tampa-St. Petersburg-Clearwater (nine percent); Cape Coral-Fort Myers (six percent); and North Point-Sarasota-Bradenton (five percent).

Transaction details

  • 72 percent of foreign buyers made an all-cash purchase.
  • 68 percent of foreign buyers purchased residential property for vacation, residential rental or for both uses (72 percent in 2016); 49 percent bought a townhouse or condominium (52 percent in 2016).
  • 35 percent (40 percent in 2016) purchased in a central city/urban area; 15 percent purchased in a resort area (14 percent in 2016).
  • 93 percent of foreign buyers visited Florida at least once before purchasing a property (92 percent in 2016).

Florida clients searching properties abroad

  • 17 percent of Florida’s Realtors said they had a client seeking to purchase property abroad, up from 14 percent in 2016.
  • Top countries of interest from Florida residents looking elsewhere: Colombia, Costa Rica, Spain, Canada and the Dominican Republic.
  • 75 percent were interested in residential property (79 percent in 2016).
  • 75 percent intended to use the property for vacation, residential rental or both uses (84 percent in 2016).

Florida’s Realtors interaction with international clients

  • While international business rose, fewer Realtors in Florida (44 percent) said they worked with an international client in 2017 (48 percent in 2016).
  • 61 percent of Realtors said they did not have cultural and language problems.
  • Personal contacts, previous clients and business contacts accounted for 72 percent of referrals or leads.
  • An agent’s firm, franchise website or social media was the primary source of online leads, followed by other aggregator websites and®.
  • Respondents were evenly split about the outlook in the next 12 months: 43 percent expected the same or an increase in international clients, 42 percent expected a decrease, and 15 percent had no opinion.
  • 56 percent expect foreign retirees to be potential clients.

To learn more about investing in Florida real estate, contact an expert member of the 9 Core Realty team.


Preparing for new homes, neighborhood at Babcock Ranch

Homebuilder, Pulte is getting ready to build its first inventory home in Babcock Ranch. It’s just the beginning of their plan to build more than 135 homes in that community. The Arbordale will be an unfurnished inventory home constructed in the Lake Timber neighborhood.

That is the reality — the dynamic need — people want to move in right away. With models, by the time you design the house and pick the options it takes longer. Having inventory homes for people to move in right away adds to the velocity.

The three-bedroom, two-bathroom Arbordale spans 1,980 square feet under air and is priced starting in the upper $200,000s.

One of the things that make this model right for Babcock is that the garage is in the back leaving more room in the front for a porch. A trademark of homes in Babcock are front porches that facilitate the idea of a neighborhood and neighbors meeting neighbors. The other thing that is great is the proximity to the town center.

The initial plans are to introduce four floor plans in the Lake Timber area. The four plans range from 1,758 square feet to 3,293 square feet. There are both one- and two-story options. Currently there are plans for six homes in that section but they might expand and add more sites if the product is successful.

To learn more about investing in Babcock Ranch, contact an expert member of the 9 Core Realty team!

Housing market at a regulatory crossroads

With home prices and sales continuing to rise across Southwest Florida, the state and the country, the real estate market appears set for a sunny future.

The talk in some quarters, though, brings up worries that another housing bubble could be developing, conceivably bursting into a runaway fire that scorches the economy again.

As unlikely as that is, some powerful political and business interests are bent on repealing some of the regulations on the financial sector that were adopted in the midst of widespread abuses in the banking and investment markets that beget the Great Recession.

September’s report by property data aggregator CoreLogic once again reflects a steady climb in housing prices. August figures compared with the same month last year show the national increase at 6.9 percent, Florida at 6.2 percent and Sarasota-Manatee at 3.9 percent. CoreLogic projects Florida’s home values will increase 6.6 percent over the next 12 months as the country’s rate rises by 4.7 percent. The company’s chief economist, Frank Nothaft, said that during the past three years, CoreLogic’s national index shows annual price growth from 5 percent to 7 percent. Home values in Florida still stand at 18 percent below pre-recession peaks.

One potential sign of trouble in the report is CoreLogic’s analysis of the country’s 100 largest metropolitan areas: 34 percent have overvalued housing stock as of August 2017. Of the 50 largest, 46 percent have an overvalued housing stock. The analysis defines “an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level … .”

The histories of the savings and loan crisis of the early 1990s and the Great Recession should serve as lessons in disaster prevention, not a road map to replay. The similarities between the causes of the S&L crisis and the financial crisis of 2007–2008 and the U.S. subprime mortgage crisis of 2007–2009 should not be startling, but demonstrate that we do indeed repeat history.

To learn more about the current state of the real estate market in SWFL, contact an expert member of the 9 Core Realty team.

Naples market shows resilience at end of third quarter

The Naples area housing market maintained positive traction during the third quarter of 2017 despite enduring a hurricane that impeded activity for three weeks in September. According to the September 2017 Market Report released by the Naples Area Board of Realtors (NABOR), which track home listings and sales within Collier County (excluding Marco Island), there were 398 closed sales during the month of September, a 30 percent decrease compared to September 2016.

September proved challenging for the real estate market as homeowners and agents were forced to wait while public and utility services rebuilt or repaired infrastructure damaged by the hurricane. This was reflected in statistics released for September, which affected total outcomes for the third quarter of 2017. However, year-to-date numbers tell a different story as activity in pending, closed and median price categories were up year over year at the end of the quarter.

To withstand a hurricane and still outperform last year’s activity is a clear sign of market. Broker analysts, who reviewed both reports, agreed that the county’s hurricane building code standards and quality craftsmanship by local builders helped to greatly reduce the amount of major structural damage in the area.

September is typically when the housing market takes a breath before it begins to intensify again. Yet despite a direct hit by a major hurricane, overall closed sales for the third quarter increased 3 percent (year over year). Not surprisingly, the storm’s short-term impact on the housing market in September only tempered sales slightly in the third quarter by 5 percent (quarter over quarter), which translated to just 86 fewer closed sales than in the third quarter of 2016.

Activity in July and August outperformed the same months last year. If the hurricane had not hit the area in September, the third quarter of 2017 would have shown much more impressive activity. A 55 percent decrease in pending sales for September is equivalent to three weeks of inactivity. These sales didn’t disappear, they are just delayed.

The hurricane’s force slowed inventory in September, which resulted in a third quarter decrease of 9 percent. This was most likely a result of homeowners either delaying to list because they evacuated or removing a listing because they needed time to clean up and make minor repairs to properties following the storm. The hurricane created big concerns and delays from banks, too. Most lenders are requiring re-inspections and re-appraisals of properties after the hurricane.

One element the hurricane failed to harm was the continued growth in property value for Naples. Overall median closed prices in the third quarter of 2017 increased 3 percent to $320,000 compared to $312,000 in the third quarter of 2016.

Compared to other tropical second-home destinations such as Puerto Rico, the Southwest Florida housing market fared quite well after it faced a hurricane. Broker analysts believe the area may see an uptick in sales from buyers who had their eyes set on an island home in the Caribbean.

To learn more about the Naples or Southwest Florida real estate market contact an expert member of the 9 Core Realty Team.