Foreign Buyers Drive Florida's Housing Recovery

Nicole Kenaston’s dreams of owning a home in Miami keep getting dashed. The 32-year-old federal government worker says she’s bid on at least five houses in the past three years and each time lost out to an overseas buyer paying cash. “I’ll find a place I like and can get financing for, and the all-cash buyers will come in and pay above market for it,” says Kenaston. “It’s heartbreaking.”

Foreign investment in Florida real estate—a perennial favorite for Canadian snowbirds and wealthy South Americans—has been on a tear since the end of the recession, according to a March report by the National Association of Realtors. Overseas home buyers accounted for 7.3 percent of statewide residential sales by dollar amount in 2007; the figure climbed to 19 percent in the 12 months ended June 2012, the most recent data available. Florida accounted for a quarter of all U.S. residential real estate sales to foreigners during that period, the highest level nationwide. “It feels like 2003 in South Florida,” says Peter Zalewski, owner of Condo Vultures, a brokerage and consulting firm based in Miami, looking back to the early days of the state’s housing boom.