We all love living in Florida. The white sandy beaches, diverse culture, active lifestyle and idyllic climate make it the perfect destination to live, work and play. But we’re not the only ones who have found our slice of paradise. The United States, and especially Florida, have seen a boom in real estate sales from foreign investors.
This past year, 23% of all real estate sales were from foreigners, according to the National Association of Realtors. The majority of our new neighbors originate from Canada, Europe, South America and China.
For Canadian buyers, Miami is among the top 5 markets in real estate investment with 73% of purchases in Florida, Arizona and California. 28% of sales of Florida real estate comes from Europeans, specifically France, Italy and Spain. While 26% comes from South Americans, originating from Venezuela, Argentina, Brazil and Columbia. 8% of sales comes from Asia, but is much higher on the West Coast of the United States.
One of the benefits of these types of transactions is that 60% of sales from foreign nationals are in cash. This results in faster and more secured closings.
So why are foreign investors buying Florida?
Besides our enticing climate and cultural landscape, foreign nationals appreciate the attractive prices and investment opportunities that US investment property affords them. With our soft economy in recent years the exchange rate has become favorable for foreign investors. In addition, the real estate bubble of 8 years ago has made home prices attainable for most foreigners looking for an investment vacation or rental property.
Who benefits from these types of transactions?
After coming off of a soft real estate period, sales have been up, making it a sellers marketing once again. Homeowners looking to sell are having an easier time of finding a buyer these days. Further, banks holding foreclosed and short sale properties are able to clear their backlog of bank owned properties.
States, counties and cities are also seeing an influx of tax income from the sale of real estate to foreign nationals. Since these are not permanent residents, they do not benefit from homestead exemption, thus paying higher tax on the full ad valorem value.
In addition, realtors are Realtors have had an increase in transactions from these buyers and the regional economy is benefitted with the boom in retail sales with our snowbird visitors.
There is little doubt that Florida has profited from the influx of buyers from foreign countries. But this type of transaction is a bit more specialized. Hiring the right real estate attorney and title company to handle the transaction will ensure a smooth closing.