Agents Visit Europe to Lure in Florida Mortgage Applicants, New Buyers

What’s Wanda Rayle, a Florida real estate agent, doing about her state’s slow industry?

Having just completed a trip from Norway to Spain, she’s peddling the idea that Europeans - with their strong currencies and strong economies - should be buying property in the Southwest Florida housing market.

“We have something no one else has,” Rayle said. “We have white sandy beaches, beautiful water and a city alive with culture. We’ve got everything the most discriminating buyer could want.”

The problem, Rayle and other real estate agents say, is that foreigners are well aware of the drawbacks of buying homes along the west coast with a Florida mortgage right now.

Housing hold-ups

Property taxes are high. They’ve been rising at a double-digit clip during the past few years. Insurance rates have also been shooting upward, while the threat of hurricanes and red tide remain imprinted on the brains of potential buyers.

“Florida is making a terrible mistake by assessing higher and higher values on second homes,” Rayle said. “The state is killing the market it hopes to raise taxes from.”

Despite these challenges to international sales, a growing number of Southwest Florida agents are focusing their marketing efforts abroad in the hope they can help revive the region’s sagging real estate market. For locals, Florida home mortgage payments are too high these days.

Foreigners already are bigger spenders than their domestic counterparts, a recent National Association of Realtors study showed. During the period from May 2004 to May 2005, foreigners paid a median price of $299,000 for homes in Florida. That’s $100,000 more than the $196,200 median price paid by domestic buyers during the same time period.

As a result, foreigners might still consider Southwest Florida a bargain despite the run-up in prices in the past few years.

Choosing a Florida home loan target

For Rayle and Prudential Palms real estate agent Cheryl Loeffler, the best bet for luring buyers to Florida is Europe. Nearly 60 percent of all buyers of Florida real estate already come from that part of the world, the NAR says. More than half of those came from the United Kingdom.

Because of those numbers and the obvious language advantage, Loeffler traveled to England last year to deliver PowerPoint presentations about the advantages of buying in Southwest Florida.

“I’m now seeing a lot of interest from the United Kingdom in my project downtown,” said Loeffler, referring to the yet-to-be built Atrium on Ringling condominium tower. “These people are as interested in the verve of downtown as they ever were in the beaches.”

Rather than Europe, Coldwell Banker real estate agent Barbara Ackerman is betting that Canada and Latin America will prove the most lucrative targets. Canada and Venezuela each represented 7 percent of buyers/Florida mortgage loan applicants between May 2004 and May 2005, the NAR study showed.

The problem is that Venezuelans and other Latin Americans tend to concentrate their buying in the Miami housing market, Ackerman said. But by allying herself with agents in Venezuela, Colombia and Argentina, she believes she will get more buyers from the region to visit Florida’s west coast.

In the meantime, Ackerman is convinced that Canadian buying in Southwest Florida is about to take off.

“When Sarasota-Bradenton airport set up a direct flight to Toronto, I knew the Canadians would be coming back,” Ackerman said. “In the 1980s, Sarasota was almost exclusively a Canadian domain. Now with the direct flight and a strong dollar, sales should take off again.”

Southwest Florida housing concerns

Still, Southwest Florida needs to address its drawbacks if it hopes to generate real interest from abroad, real estate agents say. Property taxes are a huge issue, Feuerstein said. They are causing fewer Germans to buy in the region and more to sell than in the past.

“I had one guy from Germany that wanted to sell his house because he was already paying $20,000 a year in taxes, and his taxes kept going up,” Feuerstein said.

Rayle, the founder of Sterling International Real Estate Services, agreed that increasing property taxes are the most pressing issue facing the region.

“Foreign buyers are knowledgeable about real estate taxes and worry about increases that they have no control over,” she said. “It would behoove the state and all its counties to take a look at how these taxes are hampering sales.”

Loeffler of Prudential Palms said that Europeans have also read a lot about hurricanes and red tide.

“There’s nothing we can do about hurricanes,” she said. “Only a calmer hurricane season will bring people back.”