Lifting of COVID-19 Travel Restrictions and the South Florida Housing Market
The recent lifting of pandemic related international travel to the United States has created huge anticipation of an influx of foreign investment within South Florida. Although foreign buyers in Florida make up approximately 5% of the dollar value of sales, analysts predict that, with the easing of travel restrictions, international buyers will flood the South Florida housing market, making the market even more competitive than ever. As a result, some experts believe that prices, especially in the luxury market, will increase.
Revenue Influx and Demand
Picture Courtesy CNBC
Yet, a major issue facing international buyers is the lack of inventory, as South Florida currently faces record lows in homes, condos, and townhome availability. In Palm Beach, for instance, there is a 51% decrease in home availability from the year before. Broward County has a 1.5 months’ supply of inventory, a 40% decrease from last year, and Miami-Dade County has a 2.2 months’ supply of single family homes, a 42% decrease. Thus, a major question is whether there are enough houses in our market at the right price for overseas buyers to buy.
Prior to the pandemic, Florida was the largest housing market for overseas buyers, accounting for approximately 20% of the nation’s total. Pre-pandemic China was the largest source of overseas buyers in the U.S. with a dollar volume of $32 billion in 2017 with Canada a close second. Now, according to a report from the Florida Realtors, most foreign buyers are from Canada, Argentina, Brazil, Colombia, and Venezuela.
New Relationships and Outlook
While the lack of residential inventory and increased demand for such inventory may continue to increase prices, there are opportunities with the easing of international COVID-19 travel restrictions. More real estate agencies, for instance, are partnering with European counterparts to offer properties. For instance, Corcoran recently announced a strategic cooperative relationship with London based Savills, who has offices in Europe, Asia, Africa, and the Middle East.
In addition, with the easing of the international travel ban and an anticipated surge of our foreign visitors, there will be an influx of revenue brought to Florida. In 2019, 14.5 million international travelers came to Florida, and spent $17.3 billion according to Visit Florida, the state’s tourist agency. This influx of revenue will not only rejuvenate our hospitality, retail, and health care sectors but also potentially encourage many to relocate or start a business in South Florida due to the weather and tax friendly incentives.
What does this all mean?
We are in the midst of changing from living in a pandemic to living with the pandemic. As a result, international travel bans into the United States that were previously placed are now being eased. With that, international travelers will bring an influx of revenue to, specifically, South Florida as in the past, especially in the South Florida housing market. While there are supply and demand issues in the housing market that may continue for some time, the silver lining is that we are moving forward, which always brings new opportunities and perspective.
From the trenches,
For thirty plus years, Oppenheim Law has served local, national, and international clientele particularly in the areas of real estate and business law. Our sister company, Weston Title & Escrow, Inc., has provided title insurance and title related services for three decades. Should you have any questions related to a real estate or business matter, feel free to call us at 954-384-6114 or contact our firm directly at email@example.com , and should you need assistance with a commercial or residential real estate closing, please call us at 954-384-6168 or firstname.lastname@example.org.