After more than a year and a half, on November 8th, the international travel restrictions to enter the US have finally been lifted for over 30 countries. The US is now allowing fully vaccinated travelers from these countries to enter the US upon showing proof of vaccination and a negative COVID test.
What does this mean for an already hot real estate market?
With the ban lifted, lines began forming at the US and Mexico borders even before daybreak. International flights are surging their way to the US with even dueling flights from cities like London, we are definitely seeing an influx of international travelers. On Monday November 8th, we saw 5,000 more arrivals than the Monday prior at Miami International Airport alone.
Though we believe many of the international travelers are here to see families after not being able to after over 19 months, we still think many are here with the purpose of investing in real estate both in this holiday wave of visitors and future waves in the new year.
International buyers in the past have made up to 5% of total sales volume in Florida. According to a report from the Florida Realtors, most foreign buyers that purchase properties in Florida come from Canada, Argentina, Brazil, Colombia and Venezuela.The report also noted that the South Florida tri-county area gets the majority of foreign buyers (approximately 52%). It is likely many international travelers will also be interested in investing in Real Estate as well. In fact, we’ve started to hear that real estate brokers and agents have already started getting calls from foreign buyers in Canada, Latin America, Europe and other countries.
However, South Florida inventory is at an all time low currently. Palm Beach County has a little over one month of inventory, a 51% decrease from last year. Broward county has a one and a half month supply, a 40% decrease from last year. Miami-Dade County also has low inventory, only a 2.2 month supply of single family homes, a 42% decrease.
Bonnie Heatzig, executive director of luxury sales with Douglas Elliman in Boca Raton said, “An enlarged buyer pool looking to purchase when the inventory is at all-time lows will likely ignite the competitive bidding processes.”
“I’ve been trying to gear up as many off-market deals in the pipeline for when the flood comes in,” said Tony Rodriguez-Tellaheche, owner and managing broker at Prestige Realty Group.
With supply limited, options will be less. So the key question is, will foreign buyers be interested in the available real estate?
International buyers are not a “one-size fits all” type of group, instead their tastes differ. As Ignacio Diaz, co-owner of Group P6, a firm of luxury residential developers explains, some prefer luxury homes and condos, others look for properties with a “resort-like” feel, and some go for new construction.
“It’s hard to generalize, but mainly the foreign buyer tends to go towards condos because of the convenience,” said Edgardo Defortuna, President & CEO of Fortune International Group.
With record lows of homes, condos and townhomes in South Florida, the big issue facing all buyers (foreign, out of state and local) is lack of inventory. This makes the holiday season a great time for realtors to network with their friends and family to find out who in their network is looking to sell their home, as listings are “worth their weight in gold”.