International buyers return to Miami
The glittering multicultural city of
Attracting international buyers for decades, but the pandemic has temporarily put a damper on foreign buyer activity which has started to reverse as travel restrictions relax.
Even during the subdued international buying market between April 2020 and March 2021, Florida attracted more foreign buyers than any other state for the 13th.e consecutive year, according to the National Association of Realtors’ 2021 profile on international transactions in the United States Residential Real Estate report. Some 22% of all homes purchased by international buyers in the United States during this period were in Florida.
And now real estate agents are seeing more and more foreign buyers in Miami with vaccines available and easier travel, but not as many as in previous years, said Craig Studnicky, CEO and President of Related ISG Realty Group in Miami. .
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âIt’s like walking in a desert for 10 miles and someone gives you a drink of water, it looks like a lake,â Mr. Studnicky said. âWe are seeing international buyers, but nothing quite like what we were seeing before. “
Domestic buyers have kept Miami’s real estate market hot despite the pandemic, he said.
âFive years ago, 75% of our sales went to overseas buyers, primarily Latin America, Central America and the Caribbean,â Studnicky said. âLast year 90% of our buyers were from the United States, so that’s a huge change. “
Another change is that foreign buyers in Miami come from different countries than in the past.
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Change in the population of foreign buyers
Miami is nicknamed the “Capital of Latin America” ââand remains a hot spot for international buyers, said Tony Rodriguez-Tellaheche, co-founder and manager of Prestige Realty Group in Miami.
âWhen other countries are doing well, like Venezuela and Brazil years ago, people in those countries like to shop in Miami,â Rodriguez-Tellaheche said. “When they’re not doing very well and people want to withdraw their money, they also come to Miami to buy houses.”
Nearly half of foreign buyers in Florida (47%) chose the Miami-Fort Lauderdale-West Palm Beach area between August 2019 and July 2020, according to the Florida Realtors Association’s Profile of International Residential Transactions in Florida 2020 Report. The top countries for foreign buyers in Florida were Canada, Brazil, Venezuela, Argentina and the UK, but now agents say they see buyers primarily from Mexico, Colombia and Peru. The political and economic circumstances of their home country often lead to home purchases in Miami.
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âMexican buyers still represent around 5% to 10% of sales in Miami and this steady flow continued as soon as Miami got out of quarantine,â Studnicky said. “They buy houses and condos as a permanent or secondary residence, not just by investing in real estate.”
Brazilian buyers, normally a large part of the Miami market, have a very weak currency against the US dollar, Mr Studnicky said. In addition, Brazil’s economy has been hit extremely hard by the pandemic. Argentinian buyers have also been absent from Miami due to the deep recession in the country, currency issues and the impact of the left-wing government there, he said.
Some Argentines who want to buy in Miami are running out of cash and struggling to get their money out of the country, said Sergio Pintos, director of PMG Residential in Miami.
“We have recently seen a noticeable increase in the number of Peruvian buyers who wish to withdraw their money from the country due to the political situation there,” Pintos said. “There is a leftist government there and people are afraid of what will happen in the years to come.”
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When the elections were held in Peru, Miami saw a rapid increase in buyers from there, Rodriguez-Tellaheche said. Covid-19 has also hit Peru particularly hard, he said.
“Most of the Peruvians we work with want to settle permanently in Miami,” Rodriguez-Tellaheche said. “They buy bigger houses for their children and because they have more family members behind them.”
As in Peru, the political and economic problems in Colombia have recently led to an increase in buyers from that country, Pintos said.
âColombians were a big part of our market before 2007, then they were gone for a while, but now we’re seeing more of them,â Pintos said. “We are also seeing more people from Chile, because the political situation there is not positive, and people want to bring their money to Miami.”
While some buyers are looking for homes they plan to use in Miami, many Colombian buyers are investing in high-end condos to preserve their wealth rather than a permanent home, Mr. Studnicky said.
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âMost of the foreign buyers we see want a permanent home or at least a second home in Miami rather than an investment property,â said Judy Zeder, real estate agent for the Jills Zeder Group, affiliated with Coldwell Banker Realty in Miami. âIt depends on the economic and political situation in the country. Some keep a place in their country of origin, settle in Miami and then come back in a few years when things stabilize. But they generally keep their second home in Miami.
Some overseas buyers may have taken a plane to view their property before making an offer or before closing, Zeder said.
âBuying on the fly is rare,â Ms. Zeder said. âAt the very least, someone usually has a family member in Florida who can watch them.â
Canadians and Brazilians, typically among Florida’s largest buying groups, are expected to return to Miami in the coming months as travel restrictions are lifted, Studnicky said.
âWe are certainly seeing a lot of foreign buyers wanting an apartment in Miami that they will use as a second or third home, but we are also seeing a lot of international investors,â Pintos said. “Either way, it’s the buyers who keep these properties as part of a long-term plan.”
What international buyers want
Miami buyers face limited inventory, especially for single-family homes, which is expected to tighten even more as foreign buyers compete with domestic buyers, Zeder said.
âSome international buyers only want a single-family home on a large waterfront lot in a gated community, which can cost $ 10-30 million if it has a great view of the water,â said Mrs. Zeder. âA house with a canal view can cost $ 3 million or $ 4 million minimum. “
The lack of single-family homes available means some buyers are turning to high-end condos with private elevators and large balconies with water views that can cost anywhere from $ 7 million to $ 40 million depending on the size of the unit. , said Ms. Zeder.
âThere is a little more inventory in condos than in homes, but as international buyers come back I expect them to take off,â Studnicky said. “I expect condo prices to increase between October and April as foreign buyers add to the demand that we are seeing from domestic buyers.”
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Miami as a weather vane
International buyers are expected to return to other parts of the United States as well as Miami as travel restrictions are lifted at home and abroad, Studnicky said.
âCovid has been handled better in the United States than in many other countries and some people want to come here to get vaccinated,â Mr Studnicky said. “Miami has a strong economy, an affluent population, and a bilingual culture that will continue to attract international buyers, particularly from Latin American countries.”
One thing that is almost certain, Zeder said, is that prices will rise as foreign buyers return to Miami and start competing with domestic buyers.