International Buyers Gobble Up Florida Home Loans, Fuel Housing Market

Even as mortgage applications decrease slightly and Florida home loan rates rise, the housing market in the Sunshine State never appears to be in real danger. A recent report by Inman News sheds light on what - or, to be precise, who - is responsible for maintaining strong real estate growth in the area:

International buyers.

Those outside the U.S. are especially drawn to Florida luxury homes, considering that the state gives foreign buyers a lot more for their money than their native countries do.

A study of foreign interest in Florida home mortgage loans

The National Association of Realtors estimated in a report last year that around 15 percent of all homes sold in Florida from May 2004 to May 2005 were purchased by foreign buyers - and real estate professionals say this influx continues to leave its mark on the luxury market.

These Florida home loan buyers are paying more for properties, as well. The median sales price of homes purchased by foreign buyers in Florida was $299,000, 52.4 percent higher than the state’s overall single-family median sales price of $196,200 during the survey period for the Realtor group’s Profile of International Home Buyers in Florida report. Moreover, about 22 percent of foreign buyers are purchasing homes priced at over $500,000.

What is the basis for these findings? The U.S. dollar has lost significant worth against the euro, British pound and Canadian dollar in the past five years. While exchange rates have not been as favorable for Latin American buyers, other factors such as political or financial instability in their home countries have played a role for these Florida home loan applicants.

Where these buyers are seeking Florida home loans

Foreign buyers have favored South Florida home loans previously, such as Ft. Lauderdale, Miami, and Naples - but higher prices in those locations have caused many international indivduals to look elsewhere, such as in the Orlando and Tampa areas.

Baby boomers are the largest population segment making up foreign buyers buying in Florida - and foreign buyers also make up a large segment of the second home market. Developers and brokers who understand the mindset of foreign buyers are likely to find a new segment to market their projects and properties to. They know that this segment is likely to continually drive the Florida home loan world.