Still, challenges remain.
Foreign buyers and investors in Florida real estate have had as rough a time as the homegrown variety in the past three years. For proof, witness Miami’s Everglades on the Bay, an 849-unit condo project built by Mexico’s prominent Cababie family that’s in bankruptcy court. But anecdotal evidence indicates foreign interest may be strengthening.
Foreign nationals, says Foley & Lardner partner Roy Barquet, still want to buy real estate in Florida. [Photo: Daniel Portnoy]
Florida has led the nation for years in purchases of homes by foreign buyers — one in four of the national total. According to a July survey by the National Association of Realtors of its members, foreign buyers accounted for 32% of home sales in Florida in the prior 12 months, up from 29% in 2008.
Credit opportunism. One in five of the members surveyed said the recession boosted buyer interest. A weak dollar makes already discounted real estate even more of a bargain. Cold cash helps too. Nationally, 93% of home buyers take out a mortgage. Foreign buyers, in contrast, used a mortgage only 32% of the time in Florida, according to the association survey. That’s in sharp contrast to the survey in 2007, when 62% borrowed to buy. Savvy foreign buyers use their ability to pay cash as a negotiating tool, says Roy Barquet, a partner at Foley & Lardner in Miami and chair of its immigration practice. They tell developers in Miami’s overbuilt condo market, "I don’t need a mortgage. I don’t need to prequalify. I don’t need to talk to your Freddie Mac person. I’m ready to wire the money right now."
Foreign Buyers of U.S. Real Estate
|Top States’ Share of Foreign Buyers||?|
|Florida’s Share of Foreign Buyers
|International Buyers in Florida by Region
|Western Europe (excluding U.K.)
|Market Share of Foreign Buyers in Florida
|Tampa-St. Petersburg- Clearwater
|Cape Coral-Fort Myers
|All other areas in Florida||32|
|Source: National Association of Realtors|
In southeast Florida, Argentina displaced the United Kingdom in the top three countries of origin for buyers while Mexico displaced Ireland in Orlando. The percentage of buyers from Latin America increased in Miami, Orlando, Bradenton-Sarasota and Tampa Bay.
Foreign buyers are even making a dent in Miami’s condo inventory. Barquet points to recent news reports about several Brickell condo buildings selling out or nearly selling out as primarily foreign nationals paying cash snatch up units on the heels of drastic price cuts by developers.
There’s good news for a real estate
industry increasingly dependent on foreign demand. Barquet, whose immigration clients are at the high end in terms of wealth, education and investment potential, reports no drop in interest in living in the United States and its desirability as place of refuge economically, socially and politically.