Snowbirds bringing cash to Florida
Canadians snapping up bargains
Canadian buyers continue to snap up Florida real estate, says a recent survey of foreign buyers produced by the National Association of Realtors on behalf of the Florida Realtors association.
The survey tracked foreign buyers for a 12-month period from mid-2010 to mid-2011.
“For that period, one in four Florida homes was purchased by a foreigner, and the largest single country represented was Canada,” says John Tuccillo, chief economist for Florida Realtors. “Canadian sales represented 10 per cent of all home sales in the state during that period.”
Canadian buyers were looking for bargains with the median price of homes purchased at a little over $151,000 US.
More than 90 per cent of those deals were completed strictly with cash.
Almost two-thirds of Canadian buyers targeted homes in f ive locations — Tampa St. PetersburgClearwater, Miami-fort Lauderdale Miami Beach, Orlando Kissimmee, Naples-marco Island, and Cape Coral-fort Myers — all in the southern half of the state that was hit particularly hard by the housing downturn.
The price of a typical south Florida condo has fallen by 45 per cent since 2005, says Tuccillo.
“There’s still strong demand at both ends of the price spectrum,” he says. “We’re seeing a lot of activity on the part of investors with a long-term view in the lower half of the market. The demand for higher-priced properties has also held up reasonably well.”
Canadians represent about 30 per cent of buyers in Naples, a popular Gulf Coast destination.
“We’re smaller than Miami and the beach is very accessible,” says Tom Doyle, a realtor with Sun Realty in Naples. “There’s no retail area blocking
MVisit our website under the heading, ‘Rec Properties,’ for more photo galleries and stories. off the waterfront — you can’t get a tattoo on Naples Beach.”
Doyle says Canadians typically snap up two-bedroom condominiums built in the late 1980s and early ‘90s near the beach at an average of $150,000.
Right on the beach, though, “it’s a sellers market, with homes going for up to $22 million,” says Doyle.
Naples housing prices are stabilizing as demand rises, he says.
“Our inventory is half what it used to be and anything worthwhile gets snapped up, most of it in cash transactions. You can’t buy anything at the price it sold for last year.”
The Fort Lauderdale super-luxury market is also rebounding, says Kelly Drum, partner in that city’s family-owned Drum Realty.
“The market was a little flat, but it’s coming back with properties in the $4 million to $20 million range in our listings,” he says.
Drum notes that property owners in the Fort Lauderdale luxury market are under little pressure to sell.
“These are typically people who have an interest in simply putting their money someplace else,” says Drum. “Properties that might have attracted $15 million in 2006 and 2007 may only sell for $10 million today, so the challenge is getting the owners to list the property to reflect the reality of today’s markets.”
In June of 2010, Drum sold a property to a Toronto buyer for $7.64 million.
“It was a spectacular property with water on three sides — like its own private island,” he says. “The gentleman purchased it just for the land and tore down a 15,000-squarefoot house to build a new 18,000-square-foot home.”
According to U.S. real estate information specialist Trulia, the median price of all properties sold in the Fort Lauderdale market was $160,000 during the quarter ending in September.
That’s up almost 12 per cent over the same time last year, but down slightly since the previous three months.
Drum doesn’t deal in distressed real estate but notes that foreclosure sales are still common in the lower-end market.
“If I was a Canadian buyer, I’d come down with cash,” says Drum.
“A cash buyer compet- ing with a mortgage contingency buyer could still walk away with a property at a discount, even if that buyer was willing to pay list. Cash commands very attractive deals in this market.”
Although geographically part of south Florida, Key West is a market all to itself. Expect to invest hours in travel time from the mainland, either by car, air or ferry.
In Key West, all real estate is in the high end,” says Cory Held, a realtor with Preferred Properties/ Coastal Realty in Key West.
Stately luxury homes ranging to about $10 million grace the community’s Old Town, while renovated homes ranging from $500,000 to $2 million are found in New Town.
The community remains under a Rate of Growth Ordinance that sees few new properties entering the market and limiting supply.
“High-end properties used to move much more quickly,” says Held. “Now properties selling at $2-million may remain on the market for a year or two — bearing in mind that might be a small house on a small property in Key West.”
Two years ago, Held sold a 5,400-square-foot home “that looked like Tara” with pool, two guest houses and beach access for $1.76-million. It had previously sold for $5.4 million.
By comparison, a similarly appointed 3,440-square-foot home, with two guest houses, four bedrooms, four and a half baths, pool and library has been offered at $2,999,999.
“I’m currently working with a couple out of Toronto who own a condo unit here and they’re looking at buying something else,” says Held.
“I’m encouraging them to hold onto it as an income property and to buy an additional property. I’d advise any Canadians entering this market to come with a certif ication of funds and to buy literally as high as you can afford.
“Key West remains very desirable and prices will def initely bounce back.”
There are bargains to be found throughout Florida, although it might mean looking beyond your ideal location.
Tuccillo’s advice to Canadian buyers: “Look for a lower-priced home in a good location that’s accessible to water and golf courses. If you can’t afford a location like Naples, move a little north to the Fort Myers-cape Coral area to f ind bargains.”
As the flat, high-end market begins to bounce back, realtor Kelly Drum of Fort Lauderdale is selling again. ‘If I was a Canadian buyer, I’d come down with cash,’ he says.
A pre-foreclosure sign on a home in Florida in 2009 near the beginning of the recession.
Florida’s beaches, warm weather and good housing prices are among the reasons Canadians are buying in the state.