Florida Realtors economist: Florida remains a hotspot for international buyers and sellers, with a slight rebound in activity in 2022. However, constraints remain.
ORLANDO, Fla – A slight rebound in sales activity in 2022 marked progress as the world continues to recover from the pandemic. Exacerbated by the war in Ukraine, supply chain issues continued to drag on the global economy despite a stronger domestic recovery.
According to Florida Realtors® 2022 Profile of International Residential Transactions in Florida Report, residential purchases (non-commercial) between August 2021 and July 2022 rose 5% compared to the prior 12-month period. The combination of higher sales and rising prices meant dollar volume also increased, reaching $15.3 billion – 20% more than $12.3 billion in 2021.
However, higher sale prices, inflation and lack of inventory continue to constrain the purchase power of buyers of any origin: 49% of respondents cited cost and 38% cited property availability as reasons for not finalizing a deal in 2022.
Florida remains a bargain compared to many other options for international buyers looking to purchase in the United States, but competition for property remains strong and offers few discounts.
Visitors to Florida from abroad – often a precursor to their long-term purchase decision – have been rebounding since travel restrictions evaporated in November 2021. In 2022, 92% of foreign buyers visited Florida before purchasing, up from 89% the year before and back to the historical trend.
South America and Canada continued to lead the pack of international visitors in 2022. These same groups also translate into buyers, with 45% of Florida’s foreign buyers coming from Latin America/Caribbean and 21% coming from Canada.
Despite a slight decline in the number of Canadians transacting in Florida, the value of what they buy is increasing, and it pushed them to the top spot with $1.7 billion in sales in 2022. By comparison, Brazilian buyers, the second largest group, purchased $486 million.
International buyers continue to favor South Florida, with 53% of purchases taking place in the Miami-Fort Lauderdale-West Palm Beach MSA, and the vast majority of those buyers coming from Latin America and the Caribbean. While only 3% of international-buyer purchases took place in the Naples-Immokalee-Marco Island MSA, 51% of them were made by Canadians.
Anyone purchasing Florida real estate in 2022 knew that prices had been rising steadily, but that’s particularly true for foreign buyers. The median sale price among Florida foreign buyers was $462,000 in 2022, increasing $114,700 from 2021’s median price of $347,300.
The median price among foreign buyers was 22% more than the median of all properties sold in Florida between August 2021 and July 2022.
Among buyers from the five countries with the most purchases, Brazilians typically purchased the most expensive properties. The reason for their higher price point of $472,140 was a combination of a preference for detached single-family homes and their focus on more expensive metros, such as the Miami-Fort Lauderdale-West Palm Beach MSA. Argentine buyers also flocked to South Florida, but they tended to purchase condominiums, which generally have a lower price than their detached counterparts. The median purchase price for Argentine buyers was $334,444 in 2022.
Cash is king among foreign buyers, with 69% of their purchases made with all cash compared to 44% for all United States buyers. Cash is most popular among buyers from Canada, Peru and Argentina, while slightly more Brazilian and Columbian buyers take on a U.S. mortgage.
Looking to get into the international buyer game? It’s all about personal contacts and referrals, as 32% and 21% of business came from those two sources respectively. Location is also a major factor, as 42% of respondents cite location as the prime reason for their purchase. For others, profitability and security of investments is what clinches the deal. Know your market and what buyers are looking for to appeal to their needs.
The 2022 Profile of International Residential Transactions in Florida report presents information from Florida Realtors members regarding residential transactions with international clients closed during the 12-month period of August 2021–July 2022. This annual survey and report is conducted to assess international investment trends in Florida residential real estate, including sales volume, characteristics of foreign buyers, and challenges and opportunities inherent in cross-border transactions.
Jennifer Warner is an economist and Florida Realtors Director of Economic Development
© 2023 Florida Realtors®
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