Foreign home buyers looking for investment or vacation properties have helped Florida’s fragile housing market in the past 12 months, according to a new survey from Florida Realtors.
Florida Realtors surveyed 1,500 Realtors on their experiences dealing with international clients between July 2011 and June 2012 and found that sales to international buyers accounted for 19 percent of all residential home sales in the state.
Those sales amount to 26 percent of all U.S. home sales to international clients – about $10.7 billion.
For more than one-third of buyers (34 percent), the house, condo or townhouse is a vacation home. Another 26 percent will use the purchase as an investment or rental property, and 19 percent will use it as a vacation and investment property.
"A number of investors allegedly find that owning physical assets in the U.S. is a comfortable choice during difficult political or economic times," the report states. "In general, respondents reported that their clients saw U.S. real estate as less expensive than was the case in their home countries."
Eighty-two percent of sales to foreign clients were in cash, down from 86 percent last year. Seventeen percent of international home buyers in Florida received a mortgage loan, compared to the 87 percent of all U.S. home sales that used mortgage financing.
“Foreign buyers typically don’t have credit ratings that are computed on scales similar to U.S. practices, don’t have Social Security numbers, and have credit and asset profiles significantly different from typical U.S. credit profiles. This makes obtaining a mortgage difficult for the foreign buyer,” the report states.
International buyers tended to purchase at the higher end of the market. The median sale price for international buyers was $194,700, compared with the $125,100 median sales price for Florida.
Canadians made up 31 percent of international buyers, the most of any single country but down from 39 percent last year. Buyers from Latin America made up 35 percent of home sales to foreign nationals, up 28 percent from the previous year.
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