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!



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.”

Southwest Florida Home Prices Rose $100,000 Since 2013

That’s correct.  Your eyes aren’t deceiving you.  Southwest Florida home prices rose $100,000 since 2013.  We could end the story right there, and it would be a beautiful story.  As you know, there’s always more to the story.

We really like where this market is right now.  We would say it is fully valued.  By that we do not mean it’s headed down.  Our market is balanced.  It’s not all the way back for some homes and for others perhaps it is.  We do not see signs of distress we saw back in late 2005 that caused us concern.

Inventory across the US is down.  Inventory in Southwest Florida went down in May to 5,369 homes.  This was down from 5,719 in April.  The number of closed homes is slightly lagging 2015 and 2016.  This is partly because of limited inventory and partly because home prices have risen so much.  Inventory was down the last few years as well, so we can’t attribute it to that.

Lower prices means more people can afford to purchase.  Let’s look back since 2013.  As you can see by the graph, the median price of a home in January 2013 was $140,000.  In May 2013, it was $176,333.  Fast forward to 2017, in January, our median price was $227,000. That is a difference of $87,000.  The May 2017 median price was $237,500.  That is a difference of $61,167. Going back 4 years and 4 months the difference is $97,500.  Pretty close to $100k in the headline.

Southwest Florida Home Prices Rose

When we look at average prices we see January 2013 came in at $215,873.  May 2017 official numbers came in at $346,559.  This is a difference of $130,686. Maybe this isn’t fair since it’s not the same months. May 2013 average prices were $288,547.  May 2017 numbers were $58,012 higher.

Either way you look at it, our market has done very well since 2013.  We’ve had a good run, and there’s no reason to believe we won’t have a good market a year from now.  We may not see $100,000 price gains going forward, and that’s OK.  Our market should move in lock-step with the general economy.  As incomes rise, so should housing.  If incomes were to fall or the economy falter, it could put pressure on the housing market.

So far 2017 has been off to a great start.  The stock market has done well and housing has done well.  Consumer confidence is higher and mortgage rates have remained low.  People have money and equity they didn’t have 4 years ago, or even one year ago.  More Southwest Florida homeowners have recently gained positive equity, such that they could now sell if they wanted to.  This wasn’t always the case.

As people’s lives change so does their housing needs.  When kids go off to college parents don’t always need that large home.  Growing families can’t stay in that tiny first home they bought, and so begins the housing cycle. Southwest Florida also has baby boomers buying 2nd homes for vacation enjoyment.  We also get people retiring from Northern states.  As America changes, so too can the Southwest Florida real estate market.  We are affected by local, national, and even world events.

To learn more about the current market in SWFL, contact an expert member of the 9 Core Realty Team.

Foreigners snap up record number of US homes

Foreign purchases of U.S. residential real estate surged to the highest level ever in terms of number of homes sold and dollar volume.

Foreign buyers closed on $153 billion worth of U.S. residential properties between April 2016 and March 2017, a 49 percent jump from the period a year earlier, according to the National Association of Realtors. That surpasses the previous high, set in 2015.

The jump follows a year-earlier retreat and comes as a surprise, given the current strength of the U.S. dollar against most foreign currencies, which makes U.S. housing even more expensive. Apparently, the value of a financial safe-haven is outweighing the rising costs.

Foreign sales accounted for 10 percent of all existing home sales by dollar volume and 5 percent by number of properties. In total, foreign buyers purchased 284,455 homes, up 32 percent from the previous year.

Half of all foreign sales were in just three states: Florida, California and Texas.

Chinese buyers led the pack for the fourth straight year, followed by buyers from Canada, the United Kingdom, Mexico and India. Russian buyers made up barely 1 percent of the purchases.

But the biggest overall surge in sales in the last year came from Canadian buyers, who scooped up $19 billion worth of properties, mostly in Florida. They are also spending more, with the average price of a Canadian-bought home nearly doubling to $561,000.

“There are more [baby] boomers now than ever before. It’s the demographic,” said Elli Davis, a real estate agent in Toronto who said she is seeing more older buyers downsize their primary home and purchase a second or third home in Florida. “The real estate here is worth so much more money. They all have more money. They’re selling the big city houses that are now $2 million-plus, where they went up so much in the last 10 to 15 years, so they’re cashing in.”

Despite the anti-immigrant rhetoric from the Trump administration, especially about building a wall between the U.S. and Mexico, nonresident buyers from Mexico were undeterred. Mexican buyers nearly doubled their purchases by dollar volume from a year earlier, coming in third behind China and Canada.

“You could easily make the point that perhaps their uptick was wanting to buy now before new immigration policy was in place,” said Adam DeSanctis, economic issues media manager at the National Association of Realtors.

In general, though, Mexicans have been buying less expensive homes. The average purchase price of buyers from Mexico came in at about $327,000, compared with the $782,000 average among Chinese buyers and $522,000 for Indian buyers. Mexicans overwhelmingly favored homes in Texas, while Chinese buyers opted more for California and, increasingly, Texas.

“The environment is much more Asian-friendly than it used to be with churches, grocery stores and schools that cater to their tastes,” said Laura Barnett, a Dallas-Fort Worth area Re/Max agent. “I have been told they target good schools and newer homes. Yards are not a high priority, but rather community parks.”

It’s also possible that Chinese buyers are being priced out of California. The average price of a home purchased by a buyer from China fell from about $937,000 to $782,000, even as the number of properties purchased jumped to nearly 41,000 from 29,000. The drop in purchasing power likely stems from tightened regulations in China with regards to capital outflow.

While international interest was quite strong in the second half of last year, it may now be weakening due to tighter regulations in China and weakening currencies in some international markets.

“Stricter foreign government regulations and the current uncertainty on policy surrounding U.S. immigration and international trade policy could very well lead to a slowdown in foreign investment,” said Lawrence Yun, chief economist for the NAR.

If you are a foreign investor looking to purchase US real estate, please contact 9 Core Realty today!

Babcock Ranch Inspires Active Living

From miles of trails, lakes and an activities calendar jam-packed with weekly, quarterly and annual events, the new eco-centric town of Babcock Ranch provides boundless opportunities for residents and visitors to immerse themselves in an active, healthy lifestyle.

Located off State Road 31, north of the Lee County Civic Center, the solar-powered town being built by Kitson & Partners will include 19,500 homes, nearly 50,000 residents and six million square feet of commercial space. When pioneer residents begin settling into homes in the Lake Timber neighborhood later this year, they’ll discover a downtown district already vibrant with daily activity.

A variety of classes in Founder’s Square are open to any and everyone who wants to get fit. From paddleboard yoga to boot camp there is a diverse menu of fitness activities for all ages and interests.

If you prefer to chart your own path to fitness, the staff at Curry Creek Outfitters is ready to help. Rent a kayak or canoe, or grab a fishing pole and hike (or bike) up to the fishing dock on Sunset Lake. The first two of many Zagster bike share stations planned for Babcock make it easy to grab a bike for an hour or a full day of exploration using an app on your smartphone.

Bottom of Form

For those who don’t want to ride solo, grab a friend and pedal out in a bright red Surrey complete with canopy.

Fun is what keeps people coming back. And there’s much more to come. The five miles of trails now open is the start of a trail network that will extend over 50 miles when completed. This summer, Lake Babcock will double in size.

To learn more about purchasing new construction at Babcock Ranch, contact a member of the 9 Core Realty team.