from Inman News

Affluent international buyers, attracted by fire-sale prices, are snapping up real estate in some U.S. markets.  In a report released March 23rd, 2012, Inman News identifies 10 markets where public records indicate foreign buyers make up the biggest share of overall buyers.

Most of the markets are located in sunny Florida, though areas in Nevada, Arizona, New York and Hawaii are also on the list. The report highlights the economic and personal factors that drive foreign buyers to buy; their preferred property types; top countries of origin; how they find the real estate professionals they work with;   why the selected markets appeal to them; and relevant demographic and housing-related characteristics for the markets, including share of foreign-born population, distressed property footprint, home-price trends, and vacancy rates.

Researched and written by Inman News reporter Andrea V. Brambila   to see full report:

shutterstock_2520715-Saint-Petersburg-No-9 Photo via Shutterstock

Waterfront homes in the St. Petersburg, Fla., area. Photo via Shutterstock





#9 Tampa-St. Petersburg-Clearwater, Fla.

Total population (2010): 2,783,243
% of all homes sold that were purchased by buyers with a foreign mailing address in the public record (May ’11 – Jan. ’12) 2.9%
Median sales price for existing, single-family homes (Q4 ’11): $135,500
Median sales price % change (Q4 ’10-Q4 ’11): 3%
Median sales price for condominiums/co-ops (Q4 ’11): $63,700
Median sales price % change (Q4 ’10-Q4 ’11): -23.8%
Top 3 countries of origin for foreign buyers: Canada, United Kingdom, Israel
% of people who moved in the past year who were foreign-born and moved from abroad (2010) 2.1%
Walk Score: 48

The Tampa  metro area accounted for 11 percent of international sales in Florida in the 12 months through June 2011,  according to a National Association of Realtors report. Only the Miami and Orlando metro areas, also on this list,  surpassed the Tampa  area’s share of the state’s international sales.

A public records analysis by  DataQuick revealed that, of all homes sold in the Tampa metro area between May 2011 and January  2012, 2.9 percent were purchased by buyers with a foreign mailing address.

Of the four counties that make up  the Tampa area, Pinellas  County (which includes St Petersburg, St Pete Beach, and all the beaches to Clearwater) had the highest concentration  of buyers listing a non-U.S. home address, at 4.6 percent, followed by Hillsborough County at 2.2 percent.

Pinellas and Hillsborough make up  the areas surrounding Tampa   Bay. They also contain  all three of the metro area’s largest cities and account for most of the  metro’s population of nearly 2.8 million.

During the time period examined by  DataQuick, foreign buyers purchased resale condos at a higher rate than any  other property type in three out of the area’s four counties. Only in Pinellas County did foreign buyers purchase new  homes at a slightly higher rate (10.5 percent) than they purchased existing  condos (9.7 percent).

Almost three-quarters (72.3 percent)  of the area’s foreign buyers were Canadian. Israel  and the U.K.  each accounted for about 4 percent of the area’s foreign buyers.

Carl Stratton, broker and general  manager at Dennis Realty and Investment Corp in Lutz, Fla.,  said the overseas buyers who work with his firm hail from Canada, Israel  and South America.

“Canada  and Israel have not had  their housing markets fall like they have in America, so the timing is not as  good to buy in their countries. South Americans see owning property in Florida (as) a status  (symbol) in addition to it being a good investment,” he said.

“Also, regardless of America’s current housing crisis, our housing  market has always bounced back, and foreign investors are banking on Tampa’s real estate leading  the country in a housing market rebound.”

His international buyers are  typically buying and renting out investment homes with three to four bedrooms,  two bathrooms and a garage.

“(It’s) good timing to buy now in the U.S.  Tampa Bay  home prices are producing a better return on investment for the rental-home  buyers compared to the same type of homes bought in different cities around the  country,” Stratton  said.

The median sales price for existing  single-family homes in the fourth quarter was $135,500, up 3 percent from the  year before. Condos sold for a median $63,700, down nearly 24 percent on a  year-over-year basis. The condo median sales price was the third-lowest among  the 10 markets featured in this report. (Condos in that price range are not generally located on the beaches but within 20 minutes of them.)

“I think Tampa/Clearwater  is a desirable and well-known large metropolitan area and has surprisingly  low-priced real estate in comparison to South Florida.  Right now the foreign buyers are buying with cash,” Stratton said.

He added that foreign buyers are open to buying  foreclosures or short sales as long as the properties meet their requirements.

Nearly 17 percent of overall sales  in the Tampa metro area were foreclosure sales  in the last three months of 2011 — the lowest share among the Florida markets on this  list and below the national rate. Nevertheless, the Tampa area had an above-average foreclosure activity rate in fourth-quarter 2011, with 1 in 149 units receiving a foreclosure filing.

“North Tampa and  Central Pasco County  (have) many newer homes available for sale. These are particularly attractive  to investors,” Stratton said. “Since there is … an abundance of  these properties currently being foreclosed on and ‘short sold,’ there is a  unique opportunity for foreign and domestic investors alike to invest in these  properties.”

Money transfers and tax regulations  can be challenging when working with foreign investors, said Stratton.

“Depending on the country, it can be difficult having the money  transferred over for the closing, so special considerations  need to be made prior to closing,” he said.

“Foreign investors need to  consider all the rules of our (Internal Revenue Service) as well as the  investors’ home-country tax regulations where the funds are originating. If the  investor doesn’t follow the rules correctly, he could have penalties from one  or both countries that will negatively affect his return on his investment.  Most foreign investors will form  a corporation and (buy) the properties in the corporation.”

Tampa-St. Petersburg-Clearwater, Fla. Metro U.S.
% homes sold purchased by buyers with non-U.S. mailing address (May ’11-Jan. ’12) 2.9% 1.1%
Hernando County 1.8%
New homes 0%
Resale condos 11.1%
Resale houses 1.8%
Hillsborough County 2.2%
New homes 2.1%
Resale condos 6%
Resale houses 1%
Pasco County 1.5%
New homes 0.4%
Resale condos 6.5%
Resale houses 1.3%
Pinellas County 4.6%
New homes 10.5%
Resale condos 9.7%
–Resale houses 1.1%
Median sales price for existing, single-family homes (Q4 2011) $135,500 $163,500
Median sales price % change (Q4 ’10-Q4 ’11) 3% -4.2%
Median sales price for condos/co-ops (Q4 ’11) $63,700 $160,800
Median sales price % change (Q4 ’10-Q4 ’11) -23.8% -1.7%
Population (2010) 2,783,243
% of people who moved in the past year who were foreign-born and    moved from abroad (2010) 2.1% 2.3%
% population age 1 or above that is foreign-born (2010) 12.8% 13.1%
% foreclosure sales (Q4 ’11) 16.7% 23.7%
Foreclosure activity rate (Q4 ’11) 1 in 149 units 1 in 222 units
Vacancy rate (2010) 17.6% 13.1%
Top 3 countries of origin for foreign buyers (May ’11-Jan.    ’12) % of all foreign buyers in metro
Canada 72.3%
United Kingdom 4.7%
Israel 4.1%
Other 18.9%