2013 Profile of International Homebuying Activity in Miami 2014-07-08
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2013 Survey of International Home Purchases
Miami-Dade-Broward, Florida Conducted by NAR Research for MIAMI Association of REALTORS®
Summary of Responses
Lawrence Yun, Senior Vice President Jed Smith, Managing Director, Quantitative Research
Gay Cororaton, Economist Data Gathered September/October 2013
Outline of Presentation
• About the Survey and Major Conclusions
• Survey Results
– Experience with International Transactions
– Buyer Characteristics
– Miami-Dade-Broward REALTOR® Designations
– Major Issues Reported by Miami-Dade-Broward REALTORS®
• Summary of Key Findings
About the Survey
• Survey Conducted During Sept 23 –Oct 11, 2013.
• Questions Focused on Miami-Dade-Broward REALTOR® Experience During Past Twelve Months.
• Invitation was sent out by Miami Association of REALTORS® to its members
• Received a Total of 1044 responses.
Miami-Dade 83%
Broward 16%
Others 1%
Area of membership of REALTOR® Respondents in Past 12 Months--2013 Miami-Dade-Broward, FL
Survey
Major Conclusions
• International sales are an important niche market for a number of Miami-Dade-Broward REALTORS.®
• Survey data concerning transactions for the 12 months ended Sept-Oct 2013 indicates a slight increase in the volume of international transactions and purchases and an increase in the purchase price.
• Majority of international clients are foreign residents (Type A). Resident foreigners (Type B transactions) are also important.
• There are discernible differences between Miami-Dade’s and Broward’s international clients regarding the volume of international transactions, mode of contact , purchase price , type and area of property purchased, top tier countries of client origin, and reason for buying
• Data indicates an increase in members who have less than 5 years of experience.
• Many respondents hold designations (e.g., CIPS, CRS, GRI, BPO) and have 6 or more years of experience.
• The international market remains important though challenging for many, requiring that REALTORS® deal with financing, language and cultural issues.
Most Miami-Dade-Broward REALTORS® Have Worked with an International Client in the Past 12 Months
75%
83% 77% 77%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013
Percent of Miami-Dade-Broward REALTOR® Respondents Who Worked With an International Client in Past 12 Months
The 2010-2012 surveys covered South Florida.
A Larger Percentage of Miami-Dade REALTORS® Have Worked with an International Client in the Past 12 Months
78%
71%
66%
68%
70%
72%
74%
76%
78%
80%
Miami-Dade Broward
Percent of Miami-Dade-Broward REALTOR®Respondents Who Worked With an International Client in Past 12 Months
Most International Clients are Non-Resident Foreigners * But Share is Lower Compared to Past Years
• Type A clients are non-resident foreigners. They reside in another country and do not plan to live permanently in the United States.
• Type B clients are recent immigrants/resident foreigners/temporary visa holders looking for primary residence in the United States.
52%
8%
39%
60%
8%
31%
44%
10%
46%
0%
10%
20%
30%
40%
50%
60%
70%
Type A Type B Both
Per
cen
t o
f re
spo
nd
ents
Type of International Client Purchasing in Miami-Dade-Broward, FL
2010 2011 2013
50% of Miami-Dade-Broward REALTORS® Closed Six or More
Transactions in 12 months ending Sept-Oct 2013
0 1 to 5 6 to 10 11 to 15 16 to 20More than
20
2011 14% 42% 22% 8% 5% 9%
2012 14% 46% 18% 10% 6% 7%
2013 10% 40% 21% 12% 6% 11%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Pe
rce
nt
of
Re
spo
nd
en
ts
Total Number of Transactions, Domestic and International, Closed in Past 12 Months
2012: 41% closed 6+ transactions 2013: 50% closed 6+ transactions
Personal Contacts, On-line Presence, and Previous Clients Are Important in Obtaining Foreign Clients
41%
26%
6%
1%
15%
1%
4%
7%
44%
25%
5%
2%
14%
2%
3%
5%
Personal Contacts
Previous Clients
Business Contact Ouside Country
Business Contact in U.S.
Online Marketing
Newspaper/yard sign
Walk-in, open house, random call
Other
How REALTORS® Get International Clients
2012 2013
Largest Source of Clients Miami-Dade: Personal Contacts
Broward: Previous Clients
47%
23%
6%
2%
14%
1%
2%
5%
32%
40%
1%
1%
13%
4%
5%
4%
Personal contacts
Previous clients
Business contact outside of the country
Business contact in the U.S.
Online marketing
Newspaper/yard sign
Walk-in, open house, random call
Other
How REALTORS® Get International Clients
Miami-Dade Broward
38% of Miami-Dade-Broward REALTORS® Had Six or More International Clients in 2013
1 2 3 4 5 6 7 8 9
2011 13% 15% 17% 9% 12% 20% 5% 3% 6%
2012 18% 17% 15% 10% 12% 18% 4% 3% 5%
2013 9% 14% 15% 11% 12% 22% 7% 3% 6%
0%
5%
10%
15%
20%
25%
Pe
rce
nt
of
Re
spo
nd
en
ts
In Past 12 Months, Number of International Clients, Regardless of Whether They Purchased Property
2012: 30% had at 6+ int’l clients 2013: 38% had at 6+ int’l clients
About One-Third of Miami-Dade-Broward REALTORS® had a Majority of Their Transactions with an International Client.
0% (None) 1% to 5% 6% to 10%11% to
15%16% to
25%26% to
50%51% to
75%76% to100%
2011 21% 21% 8% 6% 8% 11% 13% 13%
2012 24% 22% 8% 4% 8% 13% 10% 11%
2013 8% 21% 11% 5% 10% 10% 15% 20%
0%
5%
10%
15%
20%
25%
Pe
rce
nt
of
Re
spo
nd
en
ts
In Past 12 Months, Percentage of Transactions with an International Client
2012: 21% had 51+% of transactions with int’l clients 2013: 35%
37% of Miami-Dade-Broward REALTORS® Have Some Percentage of Their International Business That is Commercial
0% (None) 1% to 5% 6% to 10%11% to
15%16% to
25%26% to
50%51% to
75%76% to100%
2011 68% 17% 5% 1% 2% 2% 2% 3%
2012 68% 16% 5% 2% 3% 2% 1% 3%
2013 63% 20% 5% 3% 3% 2% 2% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Pe
rce
nta
ge o
f R
esp
on
de
nts
Percentage of International Business That is Commercial
Miami-Dade Has A Greater Percentage of REALTORS® Who Have Some Percentage of International Business That is Commercial
0%(None)
1% to 5%6% to10%
11% to15%
16% to25%
26% to50%
51% to75%
76% to100%
Miami-Dade 61% 20% 5% 3% 4% 2% 2% 3%
Broward 70% 20% 5% 3% 1% 0% 2% 0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Pe
rce
nt
of
Re
spo
nd
en
ts
Percentage of International Business That is Commercial
42% of Miami-Dade-Broward REALTORS® Were Involved in Both Residential and Commercial Transactions
0% (None) 1% to 5% 6% to 10%11% to
15%16% to
25%26% to
50%51% to
75%76% to100%
2011 63% 19% 4% 3% 2% 4% 2% 3%
2012 61% 21% 6% 3% 2% 3% 2% 2%
2013 58% 21% 6% 3% 3% 4% 3% 3%
0%
10%
20%
30%
40%
50%
60%
70%
Percent of International Buyers Involved in both a Residential and a Commercial Transaction
International Prospects Do Not Mean International Sales 71% of Miami-Dade-Broward REALTORS® Had International Clients Who Did Not
Purchase a Property
62%
53% 51%
71%
2010 2011 2012 2013
In Past 12 Months, Did You Have International Clients Who Chose Not to Purchase a Property?
“Could Not Find a Property” and “Cost of Property” Were Two Major Reasons for Not Purchasing
23%
14%
2%
11%
7%
10%
8%
15%
11%
28%
22%
2%
9%
5%
6%
6%
14%
9%
Could not find a property to purchase
Cost of property
Loss of home country benefits
Property taxes
Insurance costs
Exposure to U.S. tax laws
Immigration laws which prevent foreigners from living in theU.S continuously year round
Could not obtain financing / Not able to qualify for mortgage
Other, please specify.
Why Clients Chose Not to Purchase
2012 2013
“Could Not Find a Property” Was Reported More in Broward
26%
23%
3%
10%
4%
6%
6%
14%
9%
37%
17%
1%
3%
7%
6%
6%
15%
9%
Could not find a property to purchase
Cost of property
Loss of home country benefits
Property taxes
Insurance costs
Exposure to U.S. tax laws
Immigration laws
Could not obtain financing
Others
Why Clients Chose Not To Purchase
Miami-Dade Broward
81% of Miami-Dade-Broward REALTORS® Had at Least One International Client Who Purchased a Property
0 1 2 3 4 5 6 to 10 11 to 15 16 to 20More
than 20
2011 31% 17% 14% 11% 5% 7% 9% 3% 1% 2%
2012 33% 16% 15% 10% 6% 7% 9% 1% 1% 2%
2013 19% 16% 19% 11% 8% 7% 12% 4% 2% 2%
0%
5%
10%
15%
20%
25%
30%
35%
Pe
rce
nt
of
Re
spo
nd
en
ts
In Past 12 Months, Number of International Clients Who Purchased a Property in the U.S.
2012: 67 percent 2013: 81 percent
Median Purchase Price of a Typical Client Up in 2013
$100,000or less
$100,001to
$150,000
$150,001to
$200,000
$200,001to
$250,000
$250,001to
$300,000
$300,001to
$400,000
$400,001to
$500,000
$500,001to
$750,000
$750,001to
$1,000,000
$1,000,001or more
2011 17% 16% 12% 12% 11% 10% 8% 7% 4% 5%
2012 14% 14% 14% 12% 11% 10% 9% 7% 4% 5%
2013 8% 11% 10% 11% 9% 11% 9% 11% 9% 11%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Per
cen
t o
f re
spo
nd
ents
Distribution of Purchase Price of the Properties Purchased by Typical Client
2012 median price range: $ 200-250K 2013 median price range: $300
International Clients Typically Purchased at Higher Price in Miami-Dade Compared to Broward
Miami-Dade Broward
Median Price Range of International Buyers in Miami-Dade-Broward
$ 300,000 - $ 400,000
$ 200,000- $250,000
Condominiums: The Major Choice Detached Single-Family of Increased Interest
Detached single-family
Townhouse/rowhouse
Condo/apt Time-shareCommercial
Property
2011 16% 9% 71% 0% 5%
2012 20% 12% 64% 0% 5%
2013 23% 9% 64% 0% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Type of Property Purchased by Typical Client
Condominiums Are The Major Choice, But More so in Miami-Dade
20%
9%
67%
0% 4%
36%
10%
50%
0% 4%
Detached single-family
Townhouse/rowhouse
Condo/apartment Time-share CommercialProperty
Type of Property Purchased by International Client
Miami-Dade Broward
Commercial Purchases Concentrated in Retail and Multi-Family Properties
Office Industrial Retail Hotel Land Multi-family
2011 17% 18% 24% 9% 2% 30%
2012 21% 17% 17% 3% 4% 39%
2013 21% 11% 24% 5% 6% 35%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Type of Commercial Property Purchased by Typical Client
Next to Multi-family-- Miami-Dade: Retail Property
Broward: Office Property
21%
9%
25%
5% 5%
35%
23%
15% 15%
4% 4%
38%
Office Industrial Retail Hotel Land Multi-family
Type of Commercial Property Purchased by International Client
Miami-Dade Broward
70 Percent of Miami-Dade-Broward REALTORS® Report that Fewer than 10 Percent of International Clients Obtain a Mortgage
0 - 9 % 10 - 19% 20 - 29% 30 - 39% 40 - 49% 50 - 59% 60 - 69% 70 - 79% 80 - 89%90 -
100%
2012 72% 6% 4% 4% 2% 5% 1% 2% 1% 3%
2013 70% 7% 5% 4% 3% 4% 1% 2% 1% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Pe
rce
nt
of
Re
spo
nd
en
ts
Percent of Transactions With a Mortgage
Most Buyers Purchased Property in a Central City/Urban Area
Central city/urbanarea
Suburban area Small town/rural area Resort area
2011 63% 19% 1% 17%
2012 64% 20% 1% 16%
2013 66% 20% 1% 13%
0%
10%
20%
30%
40%
50%
60%
70%
Predominant Area in Which Typical Buyer Purchased a Property
Most Buyers Purchased Property in a Central City/Urban Area, More so in Miami-Dade
69%
16%
1%
13%
51%
36%
1%
12%
Central city/urban area Suburban area Small town/rural area Resort area
Predominant Area In Which Typical Buyer Purchased Property
Miami-Dade Broward
The Top Tier Countries of Client Origin
15%
13%
12%
8%
9%
4%
4%
3%
14%
11%
11%
8%
8%
5%
4%
4%
0% 2% 4% 6% 8% 10% 12% 14% 16%
Venezuela
Argentina
Brazil
Colombia
Canada
France
Mexico
Italy
Distribution of Responses Regarding Countries of Origin of International Clients Who Purchased Property
2012
2013
The Second Tier Countries of Client Origin
Respondents also reported international purchases from these countries:
Peru Russia
Spain Dominican Republic
United Kingdom Chile
Ecuador Germany
China Costa Rica
Honduras Nicaragua
India Panama
Others, not identified
Miami-Dade and Broward: Top Tier Countries of Client Origin
14% 12% 12%
8% 7% 6% 5% 4% 3% 3% 3% 3%
Miami Dade: Top Countries of Client Origin 14%
11% 10% 9%
7%
5% 4% 4% 3% 3%
Broward: Top Countries of Client Origin
Miami-Dade and Broward: The Second Tier Countries of Client Origin
Respondents also reported international purchases from these countries:
Miami-Dade : Chile , Ecuador, United Kingdom, Germany
Honduras, China , Nicaragua , Costa Rica, India, Others
Broward: Costa Rica, Ecuador, France, Russia, Spain, Germany, Mexico, Australia, Chile, Panama, Japan, Nicaragua, Portugal, Others
57% of Miami-Dade-Broward REALTORS® Have 6+ Years of Experience
Less than 1year
1 to 5 years 6 to 10 years 11 to 15 years 16 to 20 years21 years or
more
2011 10% 22% 32% 13% 7% 15%
2012 11% 23% 30% 16% 7% 13%
2013 21% 23% 25% 13% 8% 11%
0%
5%
10%
15%
20%
25%
30%
35%
Years of Experience as a REALTOR®
2012: 66% had 6+ years of experience 2013: 57% had 6+ years of experience
Miami-Dade Has A Greater Percentage of REALTORS® With Less than 1 Year Experience
22%
23%
25%
11%
8%
11%
16%
24%
25%
19%
5%
11%
Less than 1 year
1 to 5 years
6 to 10 years
11 to 15 years
16 to 20 years
21 years or more
Years of Experience as a REALTOR®
Miami-Dade Broward
Designations Held by Miami-Dade-Broward REALTOR® Respondents in the 2013 Survey
16%
4%
2%
5%
17%
3%
17%
9%
4%
4%
15%
12%
24%
44%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
CIPS
CCIM
SIOR
RSPS
CRS
CRB
GRI
CLHMS
ABR ABRM
SRES
BPO
ePro
TRC
Other, please specify
Percent of REALTOR® Respondents Having Designations
41% of Miami-Dade-Broward REALTORS® Reported an Increase in the Percentage of Clients Who Are International
IncreasedStayed about the
sameDecreased
Not applicable, havebeen in business less
than a year
2011 49% 34% 9% 8%
2012 45% 41% 6% 8%
2013 41% 35% 6% 18%
0%
10%
20%
30%
40%
50%
60%
Changes in the Percentage of Clients Who Are International in Past Year
REALTORS® Reported Exchange Rates as Important in Affecting the Demand for U.S. Property
Not much of an effect Moderate effect Very significant effect
2011 13% 40% 47%
2012 21% 43% 36%
2013 20% 43% 37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Effect of Exchange Rates on International Clients
Profitability of Investment and Location Noted as Most Important Factors In Purchasing a Miami-Dade-Broward Property
a secureinvestment
(safety reasons)
a profitableinvestment (yields
income)
a desirablelocation (for
vacation, visits,etc.)
Other, pleasespecify.
2011 40% 35% 20% 5%
2012 27% 34% 34% 5%
2013 28% 38% 31% 3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Most Important Factor Influencing a Purchase by an International Client of a Miami-Dade-Broward, FL Property
Most Important Factor For Purchase Miami-Dade: Profitability of Investment
Broward: Desirable Location
31%
38%
29%
3%
16%
36%
43%
4%
a secure investment(safety reasons)
a profitableinvestment (yields
income)
a desirable location(for vacation, visits,
etc.)
Others
Most Important Factor Influencing A Purchase
Miami-Dade Broward
Major Comments Reported by Miami-Dade-Broward REALTOR® Respondents in the 2013 Survey
• Miami-Dade-Broward is perceived as a highly desirable for location and investment purposes.
• Costs of paying Home Owner Association fees, property taxes, and mortgage insurance are a concern for foreign buyers.
• Access to U.S. financing is difficult; although most buyers pay cash, REALTORS® may need to discuss credit issues with some potential buyers.
• Immigration requirements are a concern to some prospective buyers. • Some potential international investors were reported as not being able to
buy property because of the low inventory of available homes. • Language and diversity of cultures can be issues in completing
transactions. – Diversity of expectations between potential purchasers and U.S. customs. – Language capabilities important.
• Some REALTORS® noted an increased need for substantial expertise, knowledge, and professionalism in dealing with international clients.
Summary
• International Sales are a Significant Market for Miami-Dade-Broward for location
and investment purposes
• Survey data indicates an increase in the volume of international transactions and purchases in the 12 months ending Sept-October 2013:
-an increase in the percentage of REALTOR® respondents having 6+ international clients (38% in 2013 vs. 30% in 2012) -an increase in the percentage of REALTOR® respondents with 51%+ of their transactions as international (35% in 2013 vs. 21% in 2012) -an increase in the percentage of REALTOR® respondents who had at least one international client who purchased property (81% in 2013 vs. 67% in 2012)
• The majority of clients are Type A (foreign residents), but the share declined; only 67 percent of respondents reported Type A clients compared to about 72-76 percent in the 2010 and 2011 surveys.
Summary, Continued
• The price paid by a typical client increased; the median price in 2013 is about $ 300,000 compared to the median price range of $ 200,000- 250,000 in 2012.
• Buyer characteristics
- Venezuela, Argentina, Brazil, Colombia, and Canada accounted for 52 percent of reported international purchases;
- Condominiums were more preferred than single- family homes, accounting for about 64 percent of purchases ;
- Mortgage financed purchases accounted for a minor portion of international sales
• Many contacts are initiated via personal relationships.
– Although personal contact is most favored, online marketing is increasing.
– For REALTORS® with only an occasional sale, some study of foreign cultures and customers can help to bring the transaction to a successful closure.
Summary--Continued
• Most Miami-Dade-Broward REALTOR® Respondents Have International Expertise and Experience – Respondents reported having a variety of designations indicating
specialized expertise. – Approximately 57 % of respondents reported being in business for
more than 5 years compared to 66% in the 12 months ending Sept 2012.
• International sales market presents unique challenges. - Learning another language can be an advantage. - Personal contacts/referrals are necessary to building an international client base. - Familiarity with tax /immigration/financing regulations is important. - Foreign clients are discouraged by additional costs such as HOA and insurance fees, so helping the client understand the rationale for these costs is critical.
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