International Buyers and Florida Real Estate

A Florida study conducted by the National and Florida Associations of Realtors showed that home sales to international buyers dropped by 65% from 2005 to 2006. The report indicates there were four major reasons for the decline:

• The excessive increase in property insurance.
• The equally substantial rise in real estate taxes.
• More stringent border security laws that make it tougher for anyone who wishes to spend an entire season in Florida very difficult.
• The increase in mortgage interest rates during the height of the winter season.

In 2006, nealy two thirds of Florida's 12,900 active Realtors® conducted no real estate transactions involving a foreign buyer. Of those who did have a transaction with a foreign buyer, 34% were from Latin America (up from 29%) and 21% from the United Kingdom (down from 33%).

The question now is "when will they come back"? No one knows for sure but with the weakened dollar against most foreign currencies and the recent steep decline in home prices, many potential foreign buyers can buy a lot of "house" in the Florida marketplace. Plus, the recent changes passed by the Florida legislature regarding property insurance and real estate taxes should help some. And, with an average 15 month supply of inventory on the market statewide, the sooner the better.

For more information on Florida real estate trends, contact us at Gulf Coast Associates.

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