Foreign Buyers and their impact on the U.S. Housing Market
In USA Today’s Article that was published on Thursday, August 5, 2021, about the current Housing market and the impact of Foreign Buyers in the Real Estate market, I am included as one of the Real Estate contributors who was interviewed. USA Today contacted me with an Interview request and it was my pleasure to participate. Click here to read the Article: Housing market-Foreign Buyers may add to housing woes.
Within the U.S., the top 3 States that have the highest number of property sales to Foreign buyers are Florida (#1), California (#2), and Texas (#3). Foreign buyers in Florida purchase properties that are located in various areas of the State, but Southeast Florida is privileged to be a global Real Estate destination and has the highest number of Foreign property sales in comparison to other areas of Florida. Currently, the top 3 origins of Florida’s foreign Buyers are Latin America and the Caribbean, Europe, and North America. Foreign buyers in South Florida are Residents of many Countries around the World.
I’ve sold properties to Foreign buyers who are from Canada, Colombia, Venezuela, Italy, Austria, and the U.K. In 2021, the number of foreign visitors to my website has doubled in comparison to foreign website traffic in 2020 and I’m receiving an increased number of inquiries from Foreign buyers. The buyers I’ve spoken with are planning future travel to South Florida to purchase properties and many of them are feeling more comfortable about resuming travel here. I’ve conducted virtual property tours via FaceTime, Whatsapp, and Zoom.
South Florida offers a beautiful and diverse variety of properties, including Single Family Homes, Condos, and Townhomes. Whether you enjoy luxury Homes, City living Downtown, Oceanfront lifestyle on the Beach, Boating lifestyle in a Waterfront Home with Dockage, Suburban living, Country Club Communities, Equestrian, or Golf Course Communities, South Florida offers all of that and more!
I included several Quotes from the Article below:
- “While the global COVID-19 pandemic has squashed sales of U.S. homes to foreign buyers over the last year, local buyers should be prepared for a rebound in competition from other countries in the next 12 months, Economists say.”
- “Economists say you should expect to compete with those buyers, especially since a large percentage of foreign buyers tend to make all-cash offers. Those offers, which are preferred by sellers as they provide certainty, accounted for 39% of international buyer transactions from April 2020 to March 2021, according to NAR.” In South Florida’s Real Estate market, the majority of Foreign buyers pay cash for their property purchases instead of financing them.
- “The decline in foreign real estate investments last year is hardly surprising given the global pandemic and travel restrictions that came with it. But what will happen when vaccinations pick up pace globally and things begin to get back to normal? Will the pent-up foreign demand put pressure on a U.S. housing market already grappling with low housing inventory and soaring prices?”
- “That’s significant since the demand for U.S. homes by foreign investors pushes up home prices, exacerbating concerns over housing affordability, says Benjamin Keys, a professor of real estate in the Wharton School at the University of Pennsylvania.”
- “Not having as active of a foreign buyer market last year was a welcome change especially when we were dealing with a severe housing shortage,” says Yun. “Now with the vaccinations making progress, it’s inevitable that in the next 12 months there will be a lot of interest.”
- “Adding foreign buyers to the mix could mean that home prices in states such as Florida, California, Texas New York and New Jersey (the top 5 most popular states among international buyers), will continue to soar, benefitting current homeowners and making it harder for those looking to enter the market.”
- “Housing markets appeal to foreign buyers looking for healthy returns, vacation homes, safe havens for their money, or a way to dodge tax restraints and corruption crackdowns in their home countries, Keys says.” In South Florida, Foreign buyers also enjoy convenient access for flights and close proximity to their Countries of primary Residence.
A return of significant numbers of Foreign buyers to South Florida’s market will increase competition for properties in a market that’s already very competitive and reduce inventory levels even further in a market that’s already dealing with very limited inventory in most segments.
Below is a graph that depicts the dollar volume of existing home purchases by Foreign Buyers (Billion dollars) in the United States. “Existing Home” refers to Homes that are owned and occupied prior to coming on the market, also known as Resales. These properties represent 90% of property sales nationwide. In areas such as Miami, Miami Beach, and Sunny Isles, there’s also a large number of new construction properties, particularly Condos, that are sold to Foreign buyers.
For additional information, review a guide on my website about buying property in South Florida as a Foreign buyer. Starting your search for properties in South Florida? Explore properties using the links below.