Fort Lauderdale Real Estate Seen As Great Investment By European And Other International Buyers
Fort Lauderdale Real Estate International Buyers Report. When you look at the current exchange rate there are soe very compelling numbers relative to what it costs a European or foreign buyer to purchase Fort Lauderdale real estate. Here are some interesting exchange rates as of today, July 4, 2008
(1) Euro Dollar = $1.59 US Dollars
(1) British Pound = $1.99 US DollarsObviously a devalued dollar provides European and other International buyers with a great opportunity and expanded purchasing power in the Fort Lauderdale real estate market.
Foreign buyers are able to take advantage of the favorable exchange rate and purchase more real estate for their money than they can buy in their own country of origin.
International buyers are particularly drawn to theFort Lauderdale real estate market’s luxury, waterfront home market and the oceanfront condos available from Palm Beach to South Beach.
The National Association of Realtors estimated in a their latest Profile of International Home Buying Activity report, that last year 7.3 percent of all homes sold in Florida last year were purchased by foreign buyers – and real estate professionals say this influx of international buyers continues to leave its mark on the luxury market.
International home buyers who purchase Fort Lauderdale real estate come from around the world with the top five countries of origin being Mexico, the United Kingdom, Canada, India and China. These buyers buy different types of properties at various prices, and plan on using the U.S. property for different reasons. But were we to craft a “profile” of the typical international home buyer, it would show:
- the typical international buyer purchased a single-family home or townhouse
- the buyer’s primary purpose in purchasing the home was as a vacation venue for family and friends
- the median sales price paid by the typical foreign buyer was $299,500 and was financed through a mortgage loan
- the typical foreign buyer in the U.S. spends 4.2 months in their U.S. property
Nearly half of foreign home buyers purchased a property that cost between $200,000 and $400,000. The median price paid for a home was 
$352,400. That is an increase from the $299,000 median price in the previous survey, and significantly greater than the median price paid by buyers in general in 2006 ($214,000). As a comparison, the Florida Association of REALTORS® reported the median sales price of an existing home was $248,300 at year-end 2006.
And about 22 percent of foreign buyers are purchasing homes priced at over $500,000. The report is based on a survey of 986 respondents who closed 1,844 home sales transactions to non-U.S. residents from May 2004 to May 2005.
Buyers of Florida residential real estate came from many different countries around the world. The majority of foreign buyers in Florida – 21 percent –were from the United Kingdom. Latin America accounted for 34 percent of foreign home buying activity in Florida, with the largest percentage of Latin American buyers coming from Venezuela (11 percent) and Colombia (4 percent).
Foreign buyers have favored South Florida locations previously, such as the Fort Lauderdale real estate market and Miami. Single-family detached homes or townhouses are still the number one residential property of choice for international buyers. 60% of foreign buyers purchased a single-family home.
That compares to 84 percent of all home buyers. But international home buyers in Florida were more likely to purchase a condominium/co-op (40 percent) than were buyers in general (11 percent).
In 2006, more than 90 percent of all home buyers nationally purchased their home using a mortgage loan. And while the majority of international buyers in Florida also financed their home purchase, they are less likely to have done so than were home buyers in general or than were all Florida home buyers.
In Florida, 85 percent of home buyers used a mortgage to finance the purchase of their home in 2006. Well over 60 percent of international home buyers financed their Florida home purchase with a mortgage. But 28 percent of foreign buyers paid cash for their property.
The proportion of foreign buyers who paid cash for their home was much greater than that for the general home buyer population – 28 percent vs. 8 percent. This could be due to the fact that those international home buyers would be expected to be wealthier households with ready cash on hand. The tax benefits of mortgage interest deductions may not apply – depending on the buyer’s home country’s tax code – which lowers the incentive to take out a mortgage.
One positive consequence for U.S. housing markets – especially those that boast a significant share of foreign home buyers – is that such purchases lower the risk of mortgage defaults. As a result, cash purchases lessen the foreclosure risk against this group of buyers. Lower foreclosure risk, in turns, lessens the possibility of a price decline in a market.
In the wake of the subprime mortgage fallout in the spring of 2007 and the subsequent increase in mortgage delinquencies and foreclosures, the healthy share of cash purchases by foreign buyers is a good sign for continued purchases by international buyers in the Fort Lauderdale real estate market.
The majority of all domestic home buyers purchase a home for use as their primary residence. For foreign buyers in Florida, an almost equal share purchased their homes to use either as a vacation property (39 percent) or for both vacation and rental purposes (37 percent). Nearly one quarter purchased the property for investment/rental purposes.
Miami and the Fort Lauderdale real estate market account for the largest share of foreign home buyers in the state. In spite of the slowdown in the U.S. and Florida housing markets, U.S. and Florida real estate is still considered a prime investment opportunity for foreign buyers. Non-U.S. residents purchase homes in this country for a variety of reasons. With the weakened U.S. dollar against foreign currencies, those foreign currencies buy a lot more than in previous years.
International buyers can buy a lot of “house” due to the current currency exchange rate; particularly in the current environment of decelerating/declining prices in Florida. One other factor has driven, and will continue to drive, the international participation in U.S. real estate markets. The U.S. market contains a large supply of real estate and it is also fairly easy to purchase a home property in the U.S..
The United States does not restrict or scrutinize most property purchases by foreigners, as happens in other countries. There are few barriers to owning a property.
The majority of home buyers from Canada purchased homes primarily as vacation properties. In fact, Canadian buyers were five times as likely to use their U.S. home for vacation use compared to rental/investment use, and more than three times as likely to purchase the property as just a vacation home compared to rental/investment and vacation use combined. 41 percent of Mexican buyers and 33 percent of Chinese buyers purchased U.S. homes for both vacation and rental/investment use.
If you are looking to purchase a home either as an investment , vacation residence or possibly looking to have a second home here in the United States, I have a lot of experience dealing with buyers from different countries. I am accessible on your time zone, I have a team of professionals including lawyers who can help with any red tape that we need to cut through, and I can help you find the best deal on your new home or condo here in the Fort Lauderdale real estate area or anywhere in the State of Florida.
We also work with a number of finance and mortgage professionals who can help guide you through the financial aspect of your purchase as well.
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