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Here’s the Upside of Wooing Foreign Homebuyers

It’s smart to keep foreign buyers in mind if you’re planning to sell your Florida residence. Foreign homebuyers are wont to pay in cash and at prices higher than the amount domestic buyers typically pay.

A survey of the National Association of Realtors (NAR) indicated this upside when dealing with foreign homebuyers. This NAR research covering April 2020–March 2021 showed that foreign buyers paid a median price of $351,800 on purchases of existing residences. This compares with the $305,500 median price of all existing homes sold in the U.S. during that one-year period.

Foreign buyers accounted for 39 percent of all cash sales transactions during the NAR survey period. Overall, 19 percent of existing U.S. homes sales were paid in cash for transactions in the year ending March 2021.

 

More Cash Payments in Florida

Significantly, an earlier NAR report showed that cash transactions of foreign homebuyers were even higher in Florida. It estimated that 64 percent of foreign buyers paid in cash for the existing homes foreigners purchased in the state between August 2019 and July 2020.

A significant slice of foreigners’ home purchases went to luxury home choices, according to the April 2020–March 2021 NAR report. It indicated that 9 percent of foreign buyers purchased residential properties worth over $1 million.

Foreigners’ purchases of existing U.S. residences totaled $54.4 billion from April 2020 to March 2021. This represents 2.8 percent of the $1.96 trillion overall U.S. home sales during the period.

Florida, as in previous years, continued to attract the most number of foreign homebuyers. The Sunshine State drew 22 percent of the foreign buyers in the recent NAR report. This share compares with the 16 percent of second-ranking California in the NAR research.

Foreigners bought U.S. residences for use as a vacation home, rental, or both. The main buyers of Florida homes were from Latin America (34 percent), Europe (23 percent), and Canada (17 percent). Notably, Florida was the top destination for Canadian and UK homebuyers.

Sarasota’s Strong Selling Points

Breaking down further the preferred destinations of foreign buyers, Sarasota ranked among their top choices. They were drawn by Sarasota’s alluring luxury coastal residences and diverse communities. Significantly, there is a growing number of these foreign buyers who purchased residences for permanent relocation.

This trend can be traced to several factors. One is the fundamental strength of the residential property market in the U.S. For Florida, in particular, the homes remain reasonably priced compared with other international home-buying destinations.

Furthermore, the U.S. economy is much stronger and more stable compared with other global home markets. The process of real estate acquisition in the U.S. is also more streamlined and better structured compared with other countries.

Good News from Tourism’s Rise

For these reasons, many real estate players including our Judy Kepecz-Hays Team are optimistic about the sustained foreign interest in Sarasota homes for sale.

The fast recovery of the Sarasota region’s tourism market from the adverse effects of the Covid-19 pandemic is another bright spot for foreign home buying. This is so considering the dynamics of the tourism industry with a positive impact on the real estate sector. As per NAR research, 89 percent of foreign buyers of Florida homes visited the state at least once before their purchase.

In a recent report, the Tampa-based Research Data Services said airline passenger arrivals in the Sarasota Bradenton International Airport have nearly reached pre-pandemic levels. For all of 2021, it is expected that traffic arrivals in the airport will hit a record 3 million passengers. This after the airport broke consecutively broke its monthly passenger traffic in recent months.