Five Reasons Why Foreigners Prefer Florida Foreclosures

by Simon Lindsay on States

There are at least five reasons why foreign investors prefer Florida foreclosures. A study conducted by a national realtor organization found that about 4 percent of total home resales in 2009 involved non-resident foreign investors and that nearly one-fourth of all foreign property purchases in the U.S. in 2008 and in 2009 involved properties in Florida.

Additionally, a survey by an organization of foreign investors showed that Miami, Orlando and other cities in Florida are among the top investment destinations for foreign property buyers.

The five reasons for the popularity of Florida as a property investment destination are the continued increase in foreclosure postings in the state; the continued price reductions as a result of surges in number of foreclosures; strong prospects for investment returns; the status of Florida as a popular vacation or tourist destination; and the relatively high number of professionals assisting foreign buyers of Florida properties.

In charts of foreclosure homes by state in the first quarter this year, Florida ranked third in foreclosure rate, with one filing out of every 57 residential units in foreclosure. It posted 153,540 units in foreclosure, including 22,050 bank owned property listing, reflecting a month-over-month increase of seven percent and a jump of 28.8 percent one year earlier.

In March, Florida ranked fourth in foreclosure rate, with one filing for every 149 homes in the state. More than 59,000 homes entered the foreclosure process, of which 8,643 units were repossessed and became foreclosure homes.

The second reason for the popularity of Florida foreclosures to foreign investors is the high number of bargain-priced properties in the state. In metro Orlando alone, the median price for condo units has fallen by a staggering 69 percent from $159,600 in March 2006 to only $49,700 in March this year.

In Miami, the median price for pre-owned single-family homes in March was $197,500, a four-percent fall from the $205,600 median price in March last year.

The price median for existing condo units fell by 8 percent to $138,800, compared to the $151,000 median in March last year.

Despite continued foreclosure postings in the state, which reflect high levels of unemployment, Florida remains popular to foreigners because of its coastal neighborhoods, its facilities for leisure and its reputation as a vacation and tourist state.

With these factors, it is not surprising that a high percentage of foreign investors find investment value in Florida foreclosures.

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