By Mike Colpitts
Home and condo prices have gotten so low in many areas of the country that foreign nationals are buying up property like it’s an old Blue Light sale at K-Mart. American real estate seems like its on sale at bargain basement prices. But whether the spike in foreigners buying property materializes into a full swung market rebound may be the bigger question.
“We’re seeing an increase,” said Lamont Crump, director of sales for Condo Vultures in Miami, Florida. “Foreign purchases make up 50 to 60% of our sales.” Investors are swarming to Miami Beach from as far away as Europe and Israel to grab American land and condos. Buyers from Columbia, Brazil, France, Italy and Norway have been counted in recent transactions.
The trend has also been seen in many other large urban U.S. markets, including Los Angeles, New York, San Francisco and Las Vegas where housing prices have deflated at least halfway from their market peaks. Record low mortgage rates tied with low property prices may be driving the beginning of a real estate rebound anticipated and hoped for by real estate professionals for years.
Pending home sales, including single-family homes and condominiums in Miami-Dade County increased 28.6% in September compared to year ago figures, according to the Miami Association of Realtors. South Florida real estate sales are up due to the impact of international buyers.
“Current market performance points to sustainable demand for South Florida properties,” said Jack H. Levine, chairman of the board of the Miami association. “Record affordability, a wide selection of properties to choose, and an enviable lifestyle continue to attract both international and U.S. buyers.”
Pending condominium sales in Miami are higher than single family homes. In September, condominium pending sales increased 40% over a year ago to 5,838 units for the month. Pending sales of single-family homes rose 16.1% over 2009 levels.
“The Euro has recently re-strengthened, resulting in even greater demand from European buyers,” said Oliver Ruiz, the association’s president. “Many Latin American buyers are looking for a safe haven to invest their money. The Miami area is the top market for European and Latin American buyers in Florida.”