MIAMI – July 6, 2011 – Foreign buyers are helping to stoke home sales in U.S. vacation hot spots decimated by the real estate crash, especially in southern Florida.
For the 12 months ending in March, 31 percent of Florida’s home sales were to foreign buyers, up from 10 percent in 2007, according to a survey by the National Association of Realtors.
In Arizona, 6 percent of sales in the same period were to foreigners. That was down from 11 percent last year but still up from 5 percent in 2007, the data show.
Foreign buyers are being enticed by low U.S. home prices, down 30 percent nationwide since peaking in 2006, and the weakened dollar, which makes their money go further. Since the start of 2006, the Canadian dollar has soared 18 percent against the U.S. dollar, while the euro has gained 22 percent, says data tracker Oanda.
U.S. home prices, meanwhile, have fallen far more than the national average in some places, down 55 percent from their peaks in Miami-Fort Lauderdale and Phoenix, and 36 percent in Los Angeles, says Zillow.com. Those are three of the most popular areas for foreigners searching for real estate on Trulia’s website, that company says.
Sales are so brisk in the Miami region now that more houses and condominiums could sell this year than in 2005, the peak year, says Ronald Shuffield, president of Esslinger-Wooten-Maxwell Realtors in Coral Gables, Fla.
“International buyers have been the fuel for the Miami recovery,” Shuffield says.
About 40 percent of buyers are international vs. less than 35 percent before the bust, he estimates. Many buyers are South American investors snapping up condominiums to rent out, says Peter Zalewski of market researcher Condo Vultures.
In the Phoenix region, there are at least 20 percent more foreigners in the market now than usual, says Don Hammer, manager of Realty Executives in Paradise Valley, Ariz.
One of those shoppers is retired hedge fund manager Peter Duerr of Austria. He’s planning to buy a home in Scottsdale, having sold one there in 2005. “The U.S. is a great buy right now,” Duerr says.
The largest share of foreign buyers, 23 percent, come from Canada, the Realtors’ survey found. China followed at 9 percent. The survey includes foreigners living abroad, those in the U.S. with long-term visas and new immigrants.