International Buyers are Optimistic in Southwest Florida

Bonita Springs – Estero – Naples Real Estate – As printed in the News Press April 2, 2011

By D. Michael Burke

International buyers are flocking to Southwest Florida to hunt for real estate bargains. These foreign real estate buyers come all the way from London, Toronto and Dusseldorf looking for profitable deals. They search the listings from throughout the Atlantic and come from the tundra region of Canada looking for real estate assets scattered with palms. The point is that international real estate buyers essentially seem to be on a shopping spree. These buyers are very optimistic regarding the overall real estate market, but are aware that this is the best time to make purchases in Florida. And, we welcome them with open arms!

Many are taking advantage of the drop in property prices, but most also see the Florida market as a desirable and secure investment for the future. In fact, during the last 12 months, foreign buyers purchased almost 25% of all the existing homes sold within the state.

According to an early 2011 survey conducted for the Florida Association of Realtors, a majority (65%) of Florida agents worked with an international client within the past 12 months and over 30% of them worked with 5 or more international clients in the same time period. Half of the survey respondents said that international buyers currently make up 25% of their business and 15% said they accounted for over 50% of their sales in the last year. The top international buyers of Florida real estate were Canadians, accounting for 36% of the foreign purchases. Other top foreign buyers included folks from Latin America at 16%, the United Kingdom at 15% and the rest of Western Europe at 14%.

Additional highlights included:

• 11% of foreign buyers bought new construction.
• 51% purchased a single-family home; 37% purchased a condo and 11% purchased a townhome.
• 38% purchased in a suburban area; 30% purchased property in a resort area; 25% purchased in a central city and 7% purchased in a small town or rural area.
• 15% of foreign buyers plan to use their property less than one month per year; 21% expect to use it one to three months and 34% three to six months.
• 81% of foreign buyers paid cash for their property purchase.

Many Real Estate agents are of the view that the interest of the foreign buyers is likely to invigorate the real estate market in the region. Their views are substantiated by the fact that the international real estate buyers not only tend to make purchases in cash, but are also financially secure. This is primarily owing to the fact that most of the countries from which they come have not been battered by the economic turmoil to the extent the United States has weathered in recent times.

Additionally, buyers from abroad would not be foreclosed on provided they are off their jobs. In general, the foreign buyers are always more secure bets for the real estate market compared to any local buyer who may be having plenty of risk in the current fiscal system.

According to statistics made available by a survey jointly undertaken by the National Association of Realtors (NAR) and Florida Realtors, as many as 112,283 members of Florida Realtors finalized approximately 90,000 transactions with foreign clients until August this year. At the same time, the survey states that during the last 12 months, transactions with international buyers contributed to roughly 22 per cent of the existing home sales in Florida.

Enter our Northern Neighbors, the Canadians

Among the foreign real estate buyers flocking Southwest Florida as well as the entire state, the Canadians seem to be taking over the market. Precisely speaking, around 36 per cent of the home sold to foreign buyers in Florida has been secured by the Canadians. According to the survey by NAR and Florida Realtors, this has made the Canadians the biggest segment among the foreign real estate buyers in Florida. Buyers from western European nations were next accounting for as many as 29 per cent deals.

Talking about the trend, lets point out that the investors from Canada has searched for real estate property in Lee County way back in the 1970s, however, their concernment appeared to disappear till about two years about.

Foreign buyers accounted for around 10 per cent of the real estate deals conducted by Island Coast Realty and of this, the Canadians were involved in approximately eight per cent of the transactions. In addition to this, the Canadians also form the bulk of the tourists who visit the region.

Going by the information provided by the Lee County Visitor & Convention Bureau, around 114,765 Canadians visited the region during 2009. In comparison to this, as many as 104,089 visitors from the United Kingdom came to the county, while the number for visitors from German-speaking countries, including Germany, Switzerland and Austria, were 180,155. This statistics was provided by Visitor and Convention Bureau (VCB) that spent approximately $265,000 on advertising, both international print and online, during the 2009-2010 fiscal.

In fact, the dominance of the Canadian real estate buyers has been such that some agents maintain a Canadian telephone number and provide offerings in the Canadian print media.

If you look at the present trend, you will find that the increasing power of the Canadian dollar or the loonie in comparison to the dollar of the United States has actually facilitated the interest of the Canadians in purchasing real estate in Florida. Presently, the exchange rate of the US dollar vs. the Canadian loonie is – one US dollar equivalent to $1.03 Canadian loonie. Moreover, the further northern country has not witnesses any foreclosure disaster or bank failure.

Compared to purchasing real estate property in Canada and other places abroad, the foreign buyer, especially the Canadians, is presently more positive regarding making purchases in Southwest Florida.

While the majority of the international real estate purchasers, which include the Canadian buyers, deal in cash, but the real property agents point out that the existence of as many as five branches of the Royal Bank of Canada in Southwest Florida has been of great convenience in conducting business with the Canadian buyers. It has been easier for people from Canada to acquire real estate property in Florida owing to the initiatives taken by the Royal Bank of Canada. Also, the majority of the lenders having close business relationships with the Canadians, but there were only a few lenders who were presently working with investors from other countries.

The foreign real estate buyers flocking Southwest Florida in search of new property may be categorized into two groups. While the first group comprises those who are searching for second homes, the second group includes buyers who acquire investment property which they want to rent out – in any case till they are prepared to make these their second home in Florida.

While the Canadians have been dominating the real estate market in Florida now, even the buyers from the United Kingdom and Germany have a considerable presence in the region. In addition, international buyers from all over the world have been showing keen interest in the region’s real estate market right now.

According to local real estate agents, while a weak US dollar has been stimulating interest among the foreign investors to acquire property in Florida, headlines and reports in the US newspapers that have been highlighting Southwest Florida as the leading area to find foreclosed properties. These are the two main aspects that seem to be facilitating the revitalization of the real estate market in the region.

Referring to the U.S. newspaper reports regarding the foreclosure properties in Southwest Florida, this has triggered worldwide Internet searches for real estate property in the region.

Are you a visitor from abroad looking for a second home or an investment property? Or, maybe you’re a seller interested in marketing your property to International Buyers? Whatever the case, make sure you get a real estate agent who knows the market well and has knowledge about International sales.