Monthly Archives: October 2011

Rising Miami Housing Prices

Saw a good article in the Miami Today from Patricia Hoyos about signs of improving home prices in the Miami area.

Experts foresee rising Miami-Dade housing prices

Residential real estate experts foresee a boost in property values due to international buyers growing increasingly interested in South Florida.

Still, with a lack of inventory, financing hurdles and more foreclosures on the horizon, the real estate industry is far from its 2005 market peak.

The state of the residential market was discussed at the fourth annual Residential Real Estate Outlook Luncheon on Friday at the Westin Colonnade in Coral Gables.

The luncheon and panel discussion were hosted by the Coral Gables Chamber of Commerce in partnership with the Miami Association of Realtors and Miami Today. Michael Lewis, Miami Today’s publisher, served as moderator.

“You can see that our monthly closings and sales are inching up,” said Patrick O’Connell, senior vice president of new business development for EWM and a panelist. “All the numbers are going in the right direction now, and that’s what we want to see.”

According to a market report by the Miami Association of Realtors, as of August, condominium sales are up 53% from one year ago and single-family home sales are up 49%. Also showing a favorable number is the residential inventory, which is down to 15,405 from last year’s 25,679 units on sale. The industry generally considers a six-month supply of residences on the market to be optimal; larger numbers tend to drive down prices.

In Florida, 31% of sales are to international buyers. In South Florida, 60% of buyers are foreign nationals, said Jack Levine, chairman of the board of the Miami Association of Realtors and a panelist. Nearly one in three international transactions in the US is in Florida, and nearly one in three international transactions in Florida is in the Miami and Fort Lauderdale area.

“The buyers are coming in here and they want to buy, and the pricing is great,” Mr. Levine said “The main problems I see are in the financing side of it.”

However, financing doesn’t seem to be a big problem for many international buyers, who tend to pay mostly with cash. Mr. Levine said foreign buyers also tend to buy residences at the higher end of the market.

Panelists agreed that the number of buyers from Brazil is increasing significantly. On average, Brazilian buyers pay about 85% in cash and only need financing for the remaining 15%, with a median purchase of $215,000, according to the market report.

Many of these international buyers are purchasing foreclosed properties as investments to rent them to others, Mr. Levine said.

“The rental market is on fire,” he said.

Around 53% of international buyers are from South American countries, including Venezuela, Brazil, Argentina and Colombia. Residents of Canada, France and Italy also represent a large number of international buyers.

Lorenzo Perez Jr., chief executive officer of Premier International Properties Inc., emphasized the need for realtors to reach international buyers through social media. With the majority of social media users not being from the US, he said, the web can be an effective way of reaching potential buyers.

Because of these international buyers, panelists predict that next year property values will rise.

“We do foresee an increase in values in properties,” said Mayelin Carbajales, vice president of Mercantil Commercebank’s residential lending sales department. “It all depends on the market. Currently, in Dade and Broward and Palm Beach, we are seeing an increase in value because of the foreign national buyers that are buying there.”

A major problem currently facing the residential real estate market is having limited inventory.

Mr. Perez said there is a demand for properties, but there hasn’t been much inventory placed out there. High numbers of bank-owned real estate properties continues to be a problem that could continue to hurt South Florida’s real estate in the upcoming year. ”From a banking perspective, we are going to see an increase in foreclosures,” Ms. Carbajales said. “We are also seeing distressed borrowers.”

According to Mr. O’Connell, the universal message from his contacts in the banking industry is that a lot of bank real estate owned properties are in the pipeline. He said real estate owned inventory in the market is currently down 50% to 60% from the peak.

In the luxury homes market, he cited a 30% decrease in inventory.

Mr. Levine said he expects the real estate owned inventory to be “gobbled up as soon as it comes back up in the market.” The question remains when these properties will be listed again on the market.

Also hurting the real estate industry are banks being more hesitant to lend than in the past.

In coming months, banks are going to require higher down payments and increase credit score requirements, Ms. Carbajales said. Overall, she predicted, standards across the country for borrowers will be raised.

With the number of foreclosures still high, banks are continuing to be concerned about the risks associated with lending, she added.

The panelists said they don’t expect foreclosures to slow down in 2012. But on the bright side, they anticipate that interest from international buyers will remain strong, increasing the value of properties.

“We aren’t able to predict with crystal balls,” Mr. Levine said. “We try to pick up trends, but it’s really, really hard, especially because there are so many moving variables.”

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In Florida property it appears that what goes down must come up!

Good hunting!

Bill Cowie
www.BritishHomesGroup.com

Orlando Florida (Kissimmee Office) 407 396 9914

British-American Chamber of Commerce Advisory Board

Request more information on Florida homes or submit a Custom Property Search Request

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The BRITISH HOMES GROUP Florida
2960 Vineland Road | Info@britishhomesgroup.com or (+1) 407 396 9914

New US Visa for International Property Investors

Here is some new US Visa news from Nick Timiraos at the WALL STREET JOURNAL:

We are finding out more about the programme which appears to be a variation on the EB5 Visa. It mentions a new Bill being voted on thatintroduces a Visa that would allow British Investors to invest in US Real Estate and obtain a residence visa.

If you would like more information on this, or other types of visas that allow you and your family to live and work in the US please use this contact form 0r call us on (+1) 407 396 9914

Foreigners’ Sweetener: Buy House, Get a Visa

The reeling US housing market has come to this: To shore it up, two Senators are preparing to introduce a bipartisan bill Thursday that would give residence visas to foreigners who spend at least $500,000 to buy houses in the U.S.

The provision is part of a larger package of immigration measures, co-authored by Sens. Charles Schumer (D., N.Y.) and Mike Lee (R., Utah), designed to spur more foreign investment in the U.S.

Foreigners have accounted for a growing share of home purchases in South Florida, Southern California, Arizona and other hard-hit markets. Chinese and Canadian buyers, among others, are taking advantage not only of big declines in U.S. home prices and reduced competition from Americans but also of favorable foreign exchange rates.

To fuel this demand, the proposed measure would offer visas to any foreigner making a cash investment of at least $500,000 on residential real-estate-a single-family house, condo or townhouse. Applicants can spend the entire amount on one house or spend as little as $250,000 on a residence and invest the rest in other residential real estate, which can be rented out.

The measure would complement existing visa programs that allow foreigners to enter the U.S. if they invest in new businesses that create jobs. Backers believe the initiative would help soak up an excess supply of inventory when many would-be American home buyers are holding back because they’re concerned about their jobs or because they would have to take a big loss to sell their current house.

“This is a way to create more demand without costing the federal government a nickel,” Sen. Schumer said in an interview.

International buyers accounted for around $82 billion in U.S. residential real-estate sales for the year ending in March, up from $66 billion during the previous year period, according to data from the National Association of Realtors. Foreign buyers accounted for at least 5.5% of all home sales in Miami and 4.3% of Phoenix home sales during the month of July, according to MDA DataQuick.

Foreigners immigrating to the U.S. with the new visa wouldn’t be able to work here unless they obtained a regular work visa through the normal process. They’d be allowed to bring a spouse and any children under the age of 18 but they wouldn’t be able to stay in the country legally on the new visa once they sold their properties.

The provision would create visas that are separate from current programs so as to not displace anyone waiting for other visas. There would be no cap on the home-buyer visa program.

Over the past year, Canadians accounted for one quarter of foreign home buyers, and buyers from China, Mexico, Great Britain, and India accounted for another quarter, according to the National Association of Realtors. For buyers from some countries, restrictive immigration rules are “a deterrent to purchase here, for sure,” says Sally Daley, a real-estate agent in Vero Beach, Fla. She estimates that around one-third of her sales this year have gone to foreigners, an all-time high.

“Without them, we would be stagnant,” says Ms. Daley. “They’re hiring contractors, buying furniture, and they’re also helping the market correct by getting inventory whittled down.”
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Bill’s Bit:

Progress at last!

New US Retirement Visa Program for International Buyers

Saw another new article on US Visas for International Buyers today from Michael Gerrity from the WORLD PROPERTY CHANNEL. It mentions a Retirement to the US Visa known as the ‘Silver Card’.

If you you like more information on a US Visa that best fits your circumstances, please use our quick US Visa Contact Form or call (+1) 407 396 9914.

Passage of New US Retirement Visa Program for International Buyers Could Create 300,000 New US Jobs

We all know the key issue to restoring U.S. housing markets, plus the U.S. economy overall, is job creation. It’s even the centerpiece of President Obama’s current agenda with his proposed Jobs Act Bill.

But an interesting idea floating around the leadership, and membership of the Florida Association of Realtors (FAR) since 2009, could now potentially create over 300,000 new jobs across the U.S. in short order.

It is the Retirement Visa Program, now affectionately called the “Silver Card.”

The Issue

The current visa system does not allow foreign citizens who own a retirement or vacation home in the United States to use that home on a full-time basis, and/or to enter and exit the U.S. without restriction.

The Florida Realtors Board of Directors supported in August 2009 a retirement visa program and initiated discussions with a coalition of interested groups outside the Realtor organization who will work to advance a federal retirement visa. This program was referred to the Public Policy Committee for further action. Florida Realtors Public Policy team continues to work with NAR’s Public Policy team on this “Silver Card” debate.

In addition, Florida Realtors commissioned research on this issue from Florida Tax Watch. The findings of the report were that a retirement visa would revive Florida’s economy. By analyzing the impact of a retirement visa on Florida’s economy, the report predicted a total number of jobs cumulatively created or supported by this additional investment in housing could range from 113,000 to 339,000 units. Additionally the GSP (Gross State Product) will reach a cumulative total of $25 billion, and the contribution to total sales is estimated between $15 and $44.7 billion.

“A large percentage of Florida property sales each year are to international buyers,” said 2011 Florida Realtors president Patricia Fitzgerald. “Realtors across the state work with clients from many different countries, who want to invest in Florida real estate or own a home in the Sunshine State. Florida Realtors supports a retirement visa, and continues to have discussions with other interested groups seeking to advance the program on the federal level.”

Legislative Outlook

FAR tells the World Property Channel that the outlook for immigration reform is uncertain at this time. As it has long been a contentious topic, little immigration reform legislation has successfully advanced. While there has been talk of Administrative support for addressing comprehensive immigration reform, the outlook for such an effort is extremely uncertain. The contentiousness of even limited reform proposals (explained more below), coupled with concerns over taking on yet another large contentious issue right on the heels of bruising debates over health reform and climate change, puts comprehensive reform legislation in doubt.

Historically speaking, the opposition to limited or targeted immigration reform has come both from those who oppose changing the nation’s current immigration laws, and those seeking comprehensive change. The concern has been that efforts to address any individual immigration-related issues, including those enjoying widespread support, will diminish momentum in Congress for broader immigration reform. Consequently, these pro-immigration groups have successfully targeted and blocked a number of popular immigration legislative proposals from consideration.

At the request of the NAR Leadership Team, research to evaluate the likely level of demand for a new retirement visa category was conducted by the Harris Interactive Omnibus Survey. Adults in five countries (Canada, Mexico, Great Britain, France and Germany), whose citizens have demonstrated an interest in the U.S. as a second home destination, were surveyed. The responses indicated that while a visa’s length of stay limitations did play a role in a small number of cases, concerns with new potential tax burdens played the largest role in foreign citizens’ decisions to purchase U.S. properties. Since existing NAR policy precludes support for more favorable tax treatment for foreign citizens than is accorded to U.S. citizens, this result proved problematic for efforts to overcome this critical barrier for foreign retiree purchases.

The survey results were forwarded to the leadership of the NAR policy committees with jurisdiction over the issues involved, including the Global Business Committee and Alliances, Business Issues Committee, Federal Taxation Committee and the Resorts/Second Home Committee. Based on the survey results and a review of the Congressional timeline for any possible immigration reform legislation, the committees recommended against pursuing this issue further at this time. The committees did recommend, however, that NAR continue to monitor the broader immigration debate and immediately revisit the issue should actions by the federal government warrant such a reexamination. The committee leadership also recommended that NAR focus on educating NAR members on the already existing business development opportunities vis-à-vis foreign buyers.

The Leadership Team accepted the recommendation of the committees. Consequently, NAR staff continuously monitors Congressional activities in the immigration arena for opportunities to reopen this effort and educate members on the opportunities that exist under current law.

NAR has no formal policy on the retirement visa issue. Past consideration of the issue by NAR’s policy committees resulted in competing and divergent policy recommendations. NAR does have policy supporting the right of foreign nationals to purchase property in the United States and opposing needless barriers to those purchases.

Bill’s Bit

For those high net-worth families wanting to take the “fast track” to virtually immediate US residency (usually within a year) there is always the US “EB5 Investment Visa”.

For a returnable investment (customarily within 3 – 5 years) of $500,000 in a US government-designated “Regional Center” a US permanent resident “Green Card” visa will be issued to your ENTIRE FAMILY (see www.eb5investmentvisas.com).

So let us know if you plan to retire to your place in the Florida sun – where everyone speaks English and the living costs are low.

Exciting stuff!

Enjoy the weekend!

Bill Cowie

Kissimmee Office 407 396 9914

British-American Chamber of Commerce Advisory Board

Request more information on Florida homes or submit a Custom Property Search Request

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The BRITISH HOMES GROUP Florida
2960 Vineland Road | Info@britishhomesgroup.com or (+1) 407 396 9914