Inman News reports that a devalued dollar has provided a number of buyers with more buying power in the Sunshine State, and that foreign buyers are particularly drawn to Florida luxury homes, considering that Florida gives foreign buyers more for their money than their native lands do.
The National Association of Realtors estimated in a report last year that perhaps 15 percent of all homes sold in Florida from May 2004 to May 2005 were purchased by foreign buyers – and real estate professionals say this influx of international buyers continues to leave its mark on the luxury market.
The median sales price of homes purchased by foreign buyers in Florida was $299,000, which was 52.4 percent higher than the state’s overall single-family median sales price of $196,200 during the survey period for the Realtor group’s Profile of International Home Buyers in Florida report.
And about 22 percent of foreign buyers are purchasing homes priced at over $500,000. The report is based on a survey of 986 respondents who closed 1,844 home sales transactions to non-U.S. residents from May 2004 to May 2005.
The U.S. dollar has lost significant worth against the euro, British pound and Canadian dollar in the past five years. One U.S. dollar could buy about $1.60 in Canadian dollars in January 2002, for example, compared to a current value of about $1 U.S. dollar for every $1.11 in Canadian currency.
One U.S. dollar bought almost 1.2 euros in 2002 and is now worth a fraction of the euro. The British pound is worth nearly twice as much as the U.S. dollar, and has hovered around this level for the past couple of years.
The exchange rates have not been as favorable for Latin American buyers, though other factors such as political or financial instability in their home countries have played a role for those buyers.
The devalued dollar has also caused solid items, such as gold and real estate, to become more solid investments over the years.
Foreign buyers have favored South Florida locations previously, such as Ft. Lauderdale, Miami, and Naples, but higher prices in those locations have caused many foreign buyers to buy elsewhere, such as in the Orlando and Tampa areas.
Baby boomers are the largest population segment making up foreign buyers buying in Florida, and foreign buyers make up a large segment of the second home market. Most foreign buyers find homes and condos using the Internet, according to the report. Developers and brokers who understand the mindset of foreign buyers are likely to find a new segment to market their projects and properties to.
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