MIAMI, FL - The South Florida condo market - buoyed in recent years by international investors with strong foreign currencies - is bracing for the impact that the rapidly deteriorating currencies in Western Europe - a key source of overseas investors - could have on the tricounty region, according to a new report from CondoVultures.com.
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Western Europe's two major currencies - the Euro and the British Pound - have weakened noticeably against the U.S. Dollar in recent days as the debt crisis in Greece has reignited fears of a financial meltdown that could unravel the Euro and trigger a global contagion at a time when the South Florida condo market is showing signs of stabilizing.
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Some industry watchers contend the weakening European currencies - combined with a push for higher taxes by the new government in France - could prompt foreign buyers to step up their investments in the United States - and South Florida - as many think this nation's economy is improving.
The Euro - a currency used by 17 European countries - is valued at $1.2768 (U.S. Dollars) as of May 23, 2012, down from $1.2811 (U.S. Dollars) a week earlier on May 16, 2012. A month prior on April 23, 2012, the Euro was valued at $1.3203 (U.S. Dollars), according to the currency exchange website OandA.com.
The United Kingdom's British Pound is valued at $1.5799 (U.S. Dollars) as of May 23, 2012, down from $1.6061 (U.S. Dollars) a week earlier on May 16, 2012. A month prior on April 23, 2012, the British Pound was valued at $1.6119 (U.S. Dollars).
(Cairo skyline middle left photo) International buyers have played a major role in acquiring the excess South Florida condo inventory that flooded the market beginning in 2007 at the start of real estate crash.
Estimates are that foreign buyers acquire an estimated $3.8 billion annually in condo, townhouse, and single-family house resales in the Miami - Fort Lauderdale - Miami Beach market, according to a report from the Florida Realtors association in conjunction with the National Association of Realtors.
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For Florida, Western Europe - including the countries of France, Germany, and Spain - account for 23 percent of all foreign transactions in the state, according to the Realtors report.
The median resale price paid by a European for a Florida property is $232,500 for investors from Western Europe and $169,200 for investors from the United Kingdom.
In addition to resales, foreign buyers are also purchasing new condo units directly from South Florida developers – or lenders that have repossessed troubled properties - with unsold inventory from the boom that began in 2003.
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As of the first quarter of 2012, buyers have acquired more than 90 percent of the nearly 49,000 new condos created during the boom in the seven largest coastal condo markets of Greater Downtown Miami, South Beach, Sunny Isles Beach, Hollywood / Hallandale Beach, Downtown Fort Lauderdale and the Beach, Boca Raton / Deerfield Beach, and Downtown West Palm Beach and Palm Beach Island.
Foreign buyers are not only purchasing distressed properties but also playing a key role in the latest South Florida new condo boom where at least 31 towers with nearly 6,250 units are proposed as of May 23, 2012, according to the Preconstruction Condo Projects list from the licensed Florida real estate brokerage CVR Realty™.
Condo Vultures® LLC is a real estate consultancy and marketing company based in the 225 Midtown Building at 225 NE 34th St., Suite 209B, Downtown Miami, Florida, 33137. Condo Vultures® LLC can be reached at 800-750-0517.
The buyer was Minas Properties, LLC from Los Angeles and was represented by Empire Estates Group. The property sold at a cap rate of 6.2 percent.
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