By: Mary Shanklin and Adelaide Chen
Long the top choice for international buyers in the U.S., Florida also leads the country for foreign buyers selling off their real estate stakes.
The state drew 22 percent of the country’s international buyers purchasing property and 26 percent of the country’s sell-offs by foreign owners for the 12 months ending in March, according to the National Association of Realtors.
The sales reflect an opportune time to sell with few listings, particularly for Canadian investors who bought years ago, said Lawrence Yun, chief economist for the association.
“Canadians who bought property in Florida at a significant bargain during the foreclosure crisis, and are now thinking about selling, stand to benefit greatly,” he said Friday. “Many communities in Florida have seen swift price growth in recent years. With supply far short of overall demand, foreign homeowners looking to sell in areas around the coast and in Central Florida should have little problem finding a buyer for their home.”
Orange County property ownership records, meanwhile, show foreign addresses dwindled last year from five years ago, when bottomed-out prices drew investors from other countries — especially Canada.
Orlando real estate broker Armando Perez said he helped a Canadian couple purchase a $50,000 house in Deltona for investment purposes about five years ago. Late last year, he helped them sell it for about $150,000.
Owners with addresses in Canada, the United Kingdom, Brazil, Venezuela, China, France, Colombia, Australia, Singapore and Chile — the top 10 origins of foreign owners — dropped to 432 last year from 1,124 five years earlier. The analysis serves only as an indicator and does not include properties owned by foreign buyers who live here part time or list addresses of U.S. lawyers, companies and property managers to handle tax-related correspondence.
“They’re selling because they have investments here and purchased at a good time and, now that our dollar is rising, they’re able to get more for their money,” said Perez, a former Orange County deputy who heads Heroes Real Estate Group LLC.
The international-buyer market is important beyond sparking Central Florida’s economy. It also boosts local and state property tax coffers.
Foreign buyers spent $19.4 billion in Florida during a 12-month period that ended in late 2016, according to a National Association of Realtors report in December specifically for Florida. That was down 18 percent from the previous year.
Rising home prices, a strong U.S. dollar and tough talk about immigration at the federal level have created more uncertainties for agents marketing to foreign buyers.
But the emergence of Orlando City soccer and expansions at theme parks have boosted Central Florida’s appeal, as have higher prices in South Florida, said Kevin Mays, development director at BTI Partners which is building out Grove Resort and Spa in southwest Orange County near Walt Disney World.
Competition for buyers has increased, with developers employing new tactics to turn their heads. The Grove has brought in celebrities such as Brazilian singer Ivete Sangalo to drive excitement with prospective buyers.
“In Brazil, they are very star-struck and celebrity driven,” Mays said. “We are accommodating some celebrities.”
About to launch its second phase with about 300 residences, the Grove employs Mandarin- and Portuguese-speaking agents.
Buyers from China often seek value and a return on their investment, said Orlando real estate broker Gloria Chu, based in Dr. Phillips. They will spend $350,000 if they think they can get $2,200 in monthly rental income. Chinese buyers who speak English are even taking on property management duties to increase their net profits, she added.
“The schools here are not as good as those in Boston and New York but, compared dollar to dollar, those buyers are getting a better bargain here,” she said, adding that direct flights from Orlando to Shanghai or Beijing would draw more potential buyers to the Orlando area.
Obstacles to international purchases include immigration restrictions, property taxes, exchange rates, U.S. tax laws, and costs and maintenance fees, according the the national real estate association’s survey released earlier this month. The British pound lost ground against the U.S dollar, for instance, during a 12-month period that ended in March. And in Venezuela, runaway inflation has drawn buyers looking for a safe haven for their cash, according to the survey-based report.
Some survey respondents expressed concern about potential policy changes on immigration, trade, and international relations, the real estate group reported.
Buyers are starting to understand the federal-level talk about tougher immigration is aimed at people who come into the country illegally rather than investors, said Aurelio Martin, loan officer at SecurityNational Mortgage in Lake Mary, where he and his wife Doris specialize in loans to foreign buyers purchasing new homes as investments.
“Some clients from Mexico, we have had to reassure them that they were buying here legally,” he said.