South American Buyers Migrating to Orlando

ORLANDO—Recent reports suggest that fewer foreign buyers are investing in Miami condos. At the same time, it seems Orlando is seeing an uptick in internationals, especially South American homebuyers.

Hector Lopez, AV Homes foreign national liaison to South American homebuyers, tells GlobeSt.com he's seeing a strong demand from buyers and investors in Mexico and South America. But they aren't focused so much on Orlando condos. They are looking at traditional single-family homes.

“There's no doubt that South Florida's high home prices is one of the main reasons South Americans and other foreign buyers are looking for alternatives with prices in south Florida nearing the 2008 levels,” says Lopez. “Over the last few years South Florida's real estate market has rebounded, largely due to foreign cash, which has led to a continuous uptick in prices.”

According to Lopez, South Florida developments have also tended to require 50% up front deposits because of the greater risk of the projects. By contrast, Central Florida builders have typically require 25% of less deposits, reflecting the strong nature of the market.

But, Lopez says, there is an irony in this dynamic. Buyers that helped turn the market around, foreign buyers, are now being squeezed out due to a stronger dollar.

“South American buyers experiencing a currency crisis back home are now finding that they can't afford South Florida prices,” Lopez says. “Additionally, the influx of high-end retail shopping opportunities in the Orlando market have given an new alternative to Miami to the international buyer. So for value, sun, fun, and shopping Central Florida is the new place to be.”

In March, the Miami Downtown Development Authority's (DDA) released its First Quarter Greater Downtown Miami Market Residential Real Estate Market Study conducted by Integra Realty Resources. The report shows the condo market is reaching a point of equilibrium. You might call it a healthy correction as construction, labor and land costs rise even as currency shifts impact investor appetites. 

“All this is causing those homebuyers to head north to purchase homes that offer more value and with room to still grow,” says Lopez. “We are seeing more and more South American buyers and even Chinese buyers interested in purchasing in Central Florida. As a matter of fact, during the first quarter, AV Homes sold over 40 percent of its homes in Central Florida to the international market.”

Miami is also seeing Asian buyers picking up some of the slack. Indeed, most Miami condo developers aren't up at night wondering if their luxury products will sell.

“Latin American buyers were a boon for Downtown Miami after the recovery and through the first round of new condo deliveries, but the area is starting to see significant traction with Asian buyers,” says City of Miami District 2 Commissioner and Miami DDA Chairman Marc Sarnoff. “Downtown Miami's condo market is not dependent on Latin American buyers alone. Chinese investors and local buyers are eyeing the market. No longer is Miami just the Gateway to Latin America—we are the gateway to the world.”