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Foreign investment in Florida is flourishing. While 18 percent of real estate agents nationwide reported brokering at least one home sales transaction with international clients in 2006, 65 percent of Floridian real estate agents reported having done so during the same time period, according to the National Association of Realtors (NAR) Profile of International Home Buying Activity.

“Florida is always being spoken of very highly in Europe. People love to be here. They come out for vacations two or three times a year,” Laszlo Kovacs, CEO of Florida Investment Marketing Inc., said.

The largest percentage of international buyers in the state in 2005 came from the United Kingdom, according to the 2005 NAR Profile of International Home Buyers in Florida. British real estate buyers made up 33.3 percent of all international property transactions in the state, Western European countries made up 21.2 percent and Eastern European countries made up 3 percent.

So, why is Florida real estate so attractive to European buyers? The low value of the U.S. dollar, combined with Florida’s generally affordable real estate values, means Europeans can often find amazing deals on second homes and investment properties.

As recently as 2002 the euro and the dollar were equal in value, but recently the dollar has plummeted to an exchange rate of $1.58/€1.00. A home in Orlando at the median price of $230,000 would only cost a European buyer €144,808. The discount is better still for investors from the United Kingdom; that same Orlando house would cost a British buyer merely £115,409.

The median price paid by foreign real estate investors for a single family home in Florida was $299,000, according to the NAR Profile of International Home Buyers in Florida. This amount is significantly higher than the median price of all single family homes sold in Florida, which was $196,200. 58 percent of international buyers used a mortgage to finance their purchase, while 36 percent paid with cash.

Kovacs, who works primarily with clients in Eastern Europe, said he has “absolutely” seen an increase in the number of Europeans seeking to buy real estate in Florida. “The currency exchange has been in their favor,” he said. “It’s easier for them to buy something over here. They love the credit system that we have over here. They love financing. And they just love, generally, to deal with the United States.” He estimated that Florida Investment Marketing Inc. has conducted 150 real estate transactions in the past year with buyers from Romania, Czech Republic, Slovakia, Ukraine, Russia and Hungary. These European buyers are aware of the state of the U.S. housing market, he said, and realize that now is a good time to hold on totheir investment rather than try to resell it quickly. The majority purchased property either as a personal vacation home (38 percent) or as rental property for investment (37 percent), according to the NAR Profile of International Home Buyers in Florida.

Will increasing European investment have a positive effect on the Florida housing market? It’s possible, but difficult to say. Although Florida’s values continue to fall, the number of sales made in the state has actually increased every month this year, and this has many feeling optimistic, according to The South Florida Sun-Sentinel.

“I’m expecting a lot more European investors to come; a lot more second home buyers,” Kovacs said.

Since Europeans are buying in greater numbers because of the deals available to them, this could potentially reinvigorate Florida’s housing market with “imported” money and lend some forward momentum. But only time will tell for sure.

Written by:

Cali Zimmerman

This entry was posted on Wednesday, July 30th, 2008 at 5:57 am and is filed under FSBO. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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