Global Transactions Rebound Despite Challenges
As the world continues to recover from the pandemic, a slight rebound in sales activity in 2022 marks progress despite challenges in the global economy. Supply chain issues and the war in Ukraine have had a major impact, but residential purchases between August 2021 and July 2022 rose 5% compared to the prior 12-month period, according to the Florida Realtors® 2022 Profile of International Residential Transactions in Florida Report.
Florida remains a hotspot for international buyers and sellers, with a dollar volume increase of 20% from $12.3 billion in 2021 to $15.3 billion in 2022. Visitors to Florida from abroad – often a precursor to their long-term purchase decision – have been rebounding since travel restrictions were lifted in November 2021. In 2022, 92% of foreign buyers visited Florida before purchasing, up from 89% the year before and back to the historical trend.
South America and Canada continued to lead the pack of international visitors in 2022. These same groups also translate into buyers, with 45% of Florida’s foreign buyers coming from Latin America/Caribbean and 21% coming from Canada. Despite a slight decline in the number of Canadians transacting in Florida, the value of what they buy is increasing, and it pushed them to the top spot with $1.7 billion in sales in 2022.
International buyers continue to favor South Florida, with 53% of purchases taking place in the Miami-Fort Lauderdale-West Palm Beach MSA, and the vast majority of those buyers coming from Latin America and the Caribbean. While only 3% of international-buyer purchases took place in the Naples-Immokalee-Marco Island MSA, 51% of them were made by Canadians.
However, higher sale prices, inflation, and lack of inventory continue to constrain the purchase power of buyers of any origin. According to the report, 49% of respondents cited cost, and 38% cited property availability as reasons for not finalizing a deal in 2022. Florida remains a bargain compared to many other options for international buyers looking to purchase in the United States, but competition for property remains strong and offers few discounts.
The median sale price among Florida foreign buyers was $462,000 in 2022, increasing $114,700 from 2021’s median price of $347,300. Cash is king among foreign buyers, with 69% of their purchases made with all cash compared to 44% for all United States buyers. Cash is most popular among buyers from Canada, Peru, and Argentina, while slightly more Brazilian and Columbian buyers take on a U.S. mortgage.
Despite these challenges, Florida remains an attractive market for international buyers, with a rebound in sales activity in 2022. While there are constraints, the future looks bright as the world continues to recover from the pandemic.