Low prices, good service and a lot of sunshine recently led Susanne Solling, a Norwegian, to buy a three-bedroom home in Palm Bay, Florida, midway between Jacksonville and Miami. She paid $165,000, plus $70,000 more for furniture and a pool. She said she could not be more thrilled with her investment. “Florida is a wonderful place with lots of sun and nice, relaxed people,” said Ms. Solling, who plans to spend five to seven weeks a year in Florida. “We feel very welcome all over.”
She is not the only one. Although the global economic shift affected the real estate market in the state, as it has nearly everywhere in the United States, one significant countervailing force is being felt again: Foreign buyers’ interest in Florida.
“We have seen renewed interest in real estate, especially since late spring,” said Jennifer Howard, an agent in Destin, Florida. “We are anticipating even greater interest with the opening of the new airport.” Designed to cater to charter jets from Europe, the Panama City/Bay County International Airport is scheduled to open in the spring.
A few years ago, enthusiasm among foreigners for Florida real estate was fueled by a favorable exchange rate. Then the recession hit. Now, Ms. Howard and other agents say, foreigners are again focusing their purchasing power on the Sunshine State.
Patricia Tan, international sales director at Prudential Palms Realty in Sarasota, Florida, who capitalized on the interest by taking a marketing trip to Britain in late September, said a number of factors were contributing to a surge in activity. She said there was a growing awareness that Florida homes were “on sale,” with many listed at half of their price at the height of the property boom, around 2003 and 2004.
At the same time, European currencies have again strengthened against the dollar in recent months. This week the British pound was worth $1.58 and the euro, $1.45. And economies both domestically and abroad have improved, prompting U.S. lenders to offer mortgages to foreign nationals again.
Ms. Tan said it was almost impossible for foreign nationals to get U.S. mortgages at the start of Florida’s financial crisis, except through some local banks willing to look at applications on a case-by-case basis. But now large lenders like Bank of America are back in the market, even if they do have more stringent documentation requirements than in the past.
“Many buyers have been sitting on the fence but are now convinced that the market has bottomed out and that inventory has fallen significantly and so they have more of a limited choice and so they are buying now,” Ms. Tan said. “We have had two transactions with foreign buyers in the last 30 days and have shown property to six foreign buyers in the last month, with four of them writing contracts to purchase.”
Most of Ms. Tan’s buyers were from Britain, although there also have been some from Italy, France, Norway, Germany, Belgium and the Netherlands.
And real estate agents are not waiting for Europeans to come to them. Ruth Krinke, a real estate agent based in Steamboat Springs, Colorado, generally travels to Europe about four times a year as the National Association of Realtors’ regional coordinator for Europe. But this month she is making a three-week trip to Germany, Italy and Belgium — a packed schedule she called “unusual” — to visit property shows like Expo Real in Munich.
The overseas interest is a boon for a long-suffering sector in Florida.
After several years of robust growth, U.S. sales of existing homes were running at slightly less than five million units as of mid-2009, down from a peak of more than seven million in 2005. In Florida, there were just over 300,000 sales during the same 2009 period, while nearly 550,000 were recorded in 2005.
But without foreign buyers the decline would have been a lot worse. In 2008, foreign buyers were responsible for about one-third of new and existing home sales in Florida, according to the National Association of Realtors 2009 profile of international home buying. In 2005, overseas purchasers accounted for about 15 percent of the houses sold in the state.
Florida remains the top state for international transactions, tallying nearly one in four of all international sales in the United States in 2008.
Although buyers come from around the world, Canadians accounted for 26 percent of the state’s recent international sales. Buyers from Britain accounted for 16 percent, and the rest of Western Europe, 22 percent. A large number also come from South America and other parts of Latin America.
Tania Russo of the Valore Group in Palm Beach, Florida, said she had witnessed a surge in the number of Europeans considering a permanent move to Florida — many to take advantage of the EB-5 visa program. “I’m working with British citizens and retirees, French citizens, Russian citizens,” she said.
The EB-5 visa, created by the Immigration Act of 1990, allows foreigners to obtain a green card by making a business investment in the United States.
The U.S. Citizenship and Immigration Services recently has tried to energize the program by approving requests from at least four Florida groups to set up “regional centers” for EB-5 investments, including operations in Lake Buena Vista and Palm Beach that will pool capital for targeted investments. Also, applicants are no longer required to actively manage the business that they have invested in.
In general, Europeans say the state’s developments have exactly what they are seeking.
Ken Henry, a Norwegian, bought a second home in Central Florida late last year. With four bedrooms, three bathrooms and a three-car garage, he has more than enough space — plus the house is just 15 minutes from the ocean. He said he paid about $250,000, and regards the purchase as an investment.
“I might sell it if I get tired of the place, but I will always have a home in Florida as the place is just fabulous,” Mr. Henry said, describing it as a “well-planned community that has all I need — golf, tennis, common pool and a well-maintained green area.”