Over the past four years South Florida has seen record-breaking real estate sales. According to a report completed for the Miami Association of Realtors, Latin American buyers are leading the way in driving those real estate sales higher.
The Ultra-Rich Buyers
Ultra-rich buyers are snapping up luxury residences in Miami-Dade County and Broward County at a record pace. According to reports from 2014, 68% of these buyers are from Latin America. Rounding out these buyers are:
• Argentina – 12% of sales
• Brazil – 11% of sales
• Columbia – 8% of sales
• Canada – 7% of sales
• France – 5% of sales
• Mexico – 4% of sales
In addition to the foreign cash from these locations, China joined the list in Miami with 2% of the total sales, and this is the first time they have been on it. Considering that China is one of the strongest markets for new business, this can have major benefits for Miami home sales.
International Buyers Love Miami
In order to understand just how much international buyers are increasing Miami real estate sales, it’s important to understand just how much they are paying for their new luxury homes. Among these ultra-rich international buyers, 28% spent over $500,000, with 9% paying as much as $1 million or more. The average price per purchase comes in at just over $444,000, which is considerably more than the national average of only $245,000. Another important bit of information – 81% of these purchases were paid for in cash. These purchases have led to Florida leading the nation in international transactions, with a staggering 23% in 2014.
Why are so many foreign investors leaping to make purchases in Miami? Besides the gorgeous weather and beautiful surroundings, there are two other important reasons:
• Security of Assets – When these buyers invest their own fortunes in American properties and dollars, they protect themselves from the decreases in value that occur with the currency from their own countries.
• Luxuriousness – Another important factor for these increases is the extravagant luxuriousness of the homes that are available in South Florida. Developers understand that foreign buyers want the best of the best, and they are doing everything they can to provide it. By building residences that answer to the discerning tastes of the ultra-rich, they continue to drive massive sales.
While the influx of foreign investors in Miami has driven the increases in luxury home prices, that has also had an effect on single-family homes as well. February numbers showed that the median price for a single-family home in Miami increased by 7.9% over the previous year, coming in at $245,000. Condos also saw an increase, with median prices jumping to $189,000, which is an 8.4% increase over the previous year. The increases in February marked 39 months of increases on single-family homes, and 44 months for condos.
While all of these increases are considerable benefits, major players in the Florida real estate market caution that it is important to remember that balance and discipline are still important to ensure that these increases continue, without causing major problems in the future.