International investors are becoming increasingly intrigued by U.S real estate due to the strength of the dollar, historical low prices, desirability, and the fact that the face of economic recovery emergence is peaking through.

More and more local Florida real estate agents have dealt with an increasing number of foreign national investors and that will likely continue into 2011.  I mentioned previously that changes in value to the US dollar have had a strong impact on the international real estate business.  If you follow trends, which most savvy investors do, many believe that purchasing a home in the US is more affordable than in their own country and holds more value and future potential.

The top international markets that are putting their money in the US real estate market is Canada, Mexico, the UK, and China/Hong Kong.  Canadian investors make up for 23% of the international buyers and have remained the leading investor country for the last 3 years in the US market.

On average, foreign buyers tend to purchase closer to the upper end of the market with 16% buying homes priced at more than $500,000. According to Realtors, this was because international buyers are typically looking for a second home.

Although International buyers have had reported purchase agreements in 39 states, a majority of the total buyers are concentrated in Florida, California, Arizona and Texas. These four states account for 53% of purchases and have remained the top destinations for the past three years with Florida leading the pack.  This is in part due to lower prices and higher effective rents.  Most are drawn to those factors in addition to convenience to the tropical settings and amenities.

The majority, 66%, bought single family detached homes. However, more international buyers purchased a condo than did their US counterparts, at 23% and 7%, respectively. And only 44% of international buyers used a mortgage to pay for their home, compared to 92 percent of domestic buyers.

Some 55% of foreign buyers paid in cash and this is often because of the difficulty in establishing international credit in the US.

We are seeing big plays in single family homes and residential multi-family homes.  Due to the record number of foreclosures over the past few years, most homeowners must transition to becoming a renter.  Rental property vacancy rates are at all time lows and Capitalization Rates are achieving numbers in the teens.  If you are an international investor and would like additional information on purchasing real estate in Florida, we have expertise in the bank owned properties and can send you financials to any opportunity that fit your criteria.

Florida is set to be one of the bargain hotspots of 2010 for real estate, according to a new report.  As the global recession eases and the recovery begins, experts are forecasting that investor confidence will flow back into the US real estate market. New home sales should post an increase of around 20% from the very low levels seen in 2009, according to the report.  It points out that few real estate markets have suffered more than Florida where oversupply has been a major factor in driving down prices.  Foreclosures and a glut of unsold condominiums have especially contributed to slowing down the Florida housing market.

Sean Snaith, economics professor and forecaster for the University of Central Florida in Orlando, agrees. ‘For international buyers, 2010 will be a great time to buy in Florida.  The imbalance of supply and demand puts the buyer in the driving seat.  Large inventory, pricing power and the continuing weakness of the dollar when compared to other currencies mean awesome deals in the housing sector,’ he said.

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