Florida Real Estate Dominates International Sales
Florida real estate is hot – very hot. Once again, the State of Florida is the preferred destination for the flow of international real estate investment capital. According to the latest figures released by the National Association of Realtors, 23% of the $92.2 billion of gross sales volume of existing US homes has been placed within the happy Sunshine State. Keep in mind that these figures are only for existing home sales. If we were able to factor in the pre-construction sales that are taking place at an absolutely blistering pace throughout South Florida, Florida’s overall percentage would no doubt be much larger.
Without question, international buying interest in the United States in booming. There has been a huge 35% year-over-year leap in the gross sales figures. The National Association of Realtors Profile of International Home Buying Activity stated that foreign sales for the $92.2 billion figure has increased from the previous year’s amount of $68.2 billion. Go USA! Go Florida real estate! This comes as such welcome news after the tremendous economic hardships suffered during the Great Recession. Obama needed real estate to desperately come back as a strong overall macro-economic stimulus, and it certainly has.
Florida Real Estate Highly Attractive
Florida real estate acquisitions were led by international buyers from North America (Canada) – coming in at 34% of the overall volume. Next was Europe, coming in at 28% percent of the overall total. Rounding out in third was, the South Florida leader, Latin America at 26%. Asia and Oceania accounted for only 8% of the international Florida real estate sales, but the region was much stronger in other states.
Chinese Buying Frenzy in US
China was the leading country in acquiring US real estate assets by making purchases of $22 billion, which accounted for 24% of the overall volume. This number is a sharp increase from the previous year where the Chinese acquired $12.8 billion, which accounted for 19% of foreign real estate sales within the United States. The Chinese also spent more than any other nation per asset – coming in at a median acquisition price of $523,148.00 and mean acquisition price of $590,826.00.
Cash is King for International Buyers
All-cash buyers are quite frequent buyers of Florida real estate – especially in South Florida, where our pre-construction boom is built off of cash. The trend continued throughout the US overall for international buyers, where approximately 60 percent of reported transactions were all-cash sales, up from 33% since this data was collected in 2007. In contrast, about a third of domestic sales have been all-cash. Mortgage financing tends to be a major problem for international clients due to a lack of a U.S. based credit history, lack of a Social Security number, difficulties in documenting mortgage requirements, and financial profiles that are different in some cases from those normally received by the financial institution from domestic residents.
All in all, the trends are very positive for the overall condition of Florida real estate. The State is not only benefiting from the massive inflow of cash at the moment, it looks to be in very good standing for the future as a strong flow of international money will continue to pay property taxes.