Florida property price jump fuelled by foreign buyers

Sunday, March 09, 2014

Florida property price jump fuelled by foreign buyers

Good news from Orlando, where an increase in pending sales and higher average sales in 2013 than in 2012 confirms that the only way is up for this section of the Florida market.

Plus, Florida has also attracted the largest share of foreign buyers of any state in the US, confirming the our love affair with the balmy climate and easy lifestyle of the Sunshine State.

So what are the best numbers?

Florida's closed sales of single-family homes were up 11.8 per cent in 2013 over the 2012 figure, with pending sales (where contracts have been signed but not completed) up by an even more impressive 17.6 per cent, according to the latest figures from the Florida Realtors Industry Data and Analysis department.

The state-wide median sale price jumped 15.9 per cent for the same period, to $168,000.

Florida's success is set against an improving picture across the US, with the National Association of Realtors (NAR) recording a national increase in the median sale price for single-family homes in 2013 of 11.5 per cent compared to 2012.

The median price reached $197,100 for the year.

The figures show that not only are prices in Florida increasing faster than the US average, making it an attractive location for those looking for capital gains from real estate investment, but that they still have some way to go before they reach the national median figure of $197,100.

Prices in the Orlando area also remain well below their median peak of $264,000 in 2007, leaving investors excited about how much further prices may be expected to rise.

These factors help explain the recent surge in foreign investment in Florida's real estate, which data from the NAR Profile of International Home Buyers has shown accounted for 23 per cent of the US total.

The figure confirms Florida's position as capturing the largest share of foreign real estate investment in 2013 of any state in the US, with non-resident foreigners accounting for $6.4 billion of investment in the state in 2013.

Interestingly, the NAR data has also shown that foreign investors' desire for 'above-average properties' means that they purchase more luxurious (and expensive) homes than the state's median price.

The high-end three and four bedroom villas at The Fountains at ChampionsGate in Orlando are just the type of property that foreign investors are looking for.

With gourmet kitchens, outdoor terraces, a resort-style pool and a clubhouse within walking distance, the villas provide the sort of standards that overseas buyers now demand.

Surrounded by pine and oak trees, they offer peace and seclusion in which to enjoy Florida's year-round sunshine, yet Walt Disney World and Florida's myriad other attractions are just minutes away.

Orlando is one of Florida's most popular areas when it comes to foreign real estate investment.

"Orlando has everything - a fantastic climate, world-class theme and water parks and some of the best golf courses in Florida. It's an extremely exciting time for those looking to invest in Florida's real estate market," says Philip Button, Managing Director of Brookes & Co, the property investment specialists who are selling The Fountains in partnership with leading developer Feltrim.

The State's economics are also sound.

According to a recent report from BMO Economics, Florida's GDP is expected to increase by 3 per cent during 2014, the state's job growth rate was up 2.6 per cent year on year in December 2013 (against a national rate of 1.7 per cent) and housing starts rose by 35 per cent for the year.

By 2020, Florida's population is expected to increase by some 1.9 million people, according to the University of Florida's Bureau of Economic and Business Research.

The increase will push the state's population past 21.1 million, making it the third most populous state in the US. The increased population is expected to mean that Florida surpasses the population of New York in the near future.

With so many new residents needing housing, along with Florida's record-breaking year for tourism in 2013, it's no wonder that investors across the globe are so excited about the possibilities of the Sunshine State's dynamic real estate sector.

Get help buying a property in Florida

A Place in the Sun produces free detailed guides to buying property abroad. Download the guide to buying a property in Florida, read our useful ten-step guide to setting up a home in Florida or search our for sale listings for a property in Florida.


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