Have South American Condominium Buyers Returned to Miami?

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Aerial view of downtown Miami on Monday, May 10, 2021.

Aerial view of downtown Miami on Monday, May 10, 2021.

mocner@miamiherald.com

The Miami Herald recently published an article describing a surge in home buyers from Argentina, Chile, Colombia and Mexico buying up most of the apartments in a new condo project in Miami, with a headline that asked, “Are Home Buyers Returning from Latin America?” As a South Florida real estate specialist who has worked with South and Latin American real estate investors for nearly five decades and experienced the ups and downs in that market over the same time period, I thought it would be useful to study the compelling dynamics of this recent trend. … Some factors are the same that we know very well, while others are fascinating and unique.

A brief history lesson: While Miami has always enjoyed a steady flow of buyers and investors from Latin America until the turn of the century, much of the 2000s was marked by an explosive boom in condominium construction, fueled by wealthy foreign buyers from the region. While there was some decline during the “Great Recession” between 2007 and 2009, the power of foreign homebuyers is staggering: Between 2009 and 2017, more than 20% of Florida property buyers each year were foreigners (well ahead of Florida. California and Texas, the next two states most popular with international buyers); by 2019, that percentage had grown to about a third of all buyers.

Foreign buyers spent about $ 4.4 billion on properties in South Florida in 2010, and that number had nearly doubled to $ 8.7 billion by 2018 (from August 2017 to July 2018). Again, although “foreign” is a general term used to track this phenomenon, the vast majority of these investors were from South and Latin America.

The COVID-19 pandemic has led to a decline in foreign investment in local real estate, but that vacuum has been more than filled by an influx of US buyers seeking to relocate from cities and states with higher taxes, cost of living and stricter regulation. (I’ve seen many ups and downs in my 49 years in real estate … but nothing came close to selling and renting in the past few months!)

As the world slowly emerges from the pandemic, it was only a matter of time before South American shoppers rediscover their admiration for South Florida. What prompts them to sign contracts today?

VACCINE

The data clearly shows how well vaccines have reduced COVID cases, hospitalizations and deaths here in the US, where they are readily available but not equally available in our neighboring continent, which continues to be eroded by the pandemic. how The newspaper “New York Times It was recently reported: “Frustrated by the lagging pace of home vaccination campaigns and overdosing in the United States, where tens of millions of Americans have opted out of vaccines, wealthy Latinos and middle-class people with American tourist visas have flocked to the United States in recent weeks to get vaccinated. from COVID-19 “.

Many of my own clients chose to start or continue their Miami real estate investments during these “vaccine visits” due to fears of a new pandemic, further outbreaks, shortages of vaccines or substandard vaccines from Russia, India and China. The situation has improved somewhat in recent weeks, but these clients of mine do not regret their choice of getting vaccinated or investing in the United States. Historically, South American shoppers have largely preferred health care in the United States over their home countries.

POLITICS

Political instability in Latin America has always had a big impact on real estate investment in Miami, and I predict that the current situation in many of these countries, especially Peru, Argentina, Venezuela, Mexico, Nicaragua and Colombia, will further this trend. in the coming years. People in these countries who have the means to invest see rising crime, social upheaval, economic inequality, private sector asset forfeiture and, of course, the devastating effects of a pandemic on the doorstep, and naturally look to South Florida real estate as a safe medium. … a lighthouse to leave your money and relocate families if necessary.

AMERICAN STABILITY

Despite the fact that the United States is experiencing social, economic and health problems, it is still the best, strongest, healthiest and most stable country – and the rest of the world knows it. The challenges we face are far less acute than those faced by countries in Latin America, where too many people struggle with the problems of violence, corruption and general disorder. On the contrary, America balances “law and order” with exclusive freedoms that we too often take for granted. Combine this stability with a Hispanic culture, thriving economy and track record of profitable real estate, and you will see why South Florida will always be especially attractive to South and Latin American buyers.

A recent discussion with one of my Argentine clients illustrates two of the three factors I mentioned. He was in Miami to get the vaccine and called me about a possible sale of his existing Bal Harbor apartment and a smaller one. (The political situation in Argentina prompted him to move to Uruguay, where he feels safer and expects to spend a little less time in Miami.)

Since Miami has enjoyed great success in attracting American tech and finance companies to the region, it seems reasonable to expect more jobs to follow, leading to waves of domestic buyers continuing to flow from places like California and New York. As interest from South American buyers resumes its “normal” pace following COVID, it will be interesting to see what impact these two different pools of buyers will have on the South Florida real estate market and the region’s ever-evolving identity.

Emilio Palomo is the former chairman of the Master Brokers Forum, a network of leading real estate professionals in Miami, and owner / broker of Riteway Properties III. You can contact him at rwp3@bellsouth.net



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