Foreign investors down in florida and las vegas

Photo: Fifth World Art

Foreign investors are gradually declining in Florida and Las Vegas, as the markets begin to return to normality following the recession.

The financial crisis left a large number of affordable property opportunities for investors looking to take advantage of the high demand for rented accommodation during a period of repossessions, decreasing values and falling homeownership.

Now, though, the US property market is recovering, as sales and prices both rebound. At the same, the US dollar has also strengthened, reducing the spender power of other currencies.

In Florida, one of the most popular destinations for foreign buyers, sales prices have risen 11.1 per cent in the past year, according to the Florida Realtors' latest data for Q2 2015. The median price for townhouse-condo properties during the three months to June 2015 was $155,000, up 9.2 per cent compared to the same period in 2014.

“The second quarter statistics confirm the tightening of the real estate market in Florida,” says Florida Realtors Chief Economist Dr. John Tuccillo. “Homes are selling for higher prices in less time and at prices closer to the original list price. We clearly have a sellers’ market developing."

"Of note here is the drop in cash sales," he adds. "We’ve spoken in the past of the retreat of bulk investors in Florida, but now we’re seeing less interest on the part of foreign buyers, who are discouraged by the appreciation of the dollar against their currencies. And, as noted before, the greatest pressures in the market are located at the low end of the price spectrum."

A similar trend has occurred in Las Vegas, where sales and prices continued to increase in July 2015. The area's association of realtors reports that the median sales price of homes was $218,000 last month, up 9 per cent from a year ago.
 
The total number of existing local homes, condominiums and townhomes sold in July was 3,815, up from 3,314 one year ago. For more than two years, GLVAR has been reporting fewer distressed sales and more traditional home sales, where lenders are not controlling the transaction.
 
GLVAR says 27.1 per cent of all local properties sold in July were purchased with cash. That’s down from 28.4 in June and from 35.6 per cent one year ago. It’s well short of the February 2013 peak of 59.5 percent, indicating that cash buyers and investors are still a factor in the local housing market but that their influence is waning with each passing month.
 
"I like to compare the housing market to a marriage. It’s a good thing when it’s stable," comments 2015 GLVAR President Keith Lynam. "For the most part, that’s what we’ve seen so far this year. Home prices have been increasing, but at slower pace than the past few years. It’s also good news that we’re selling more homes throughout Southern Nevada this year than we did last year."