China Buying Seen as Growth Stimulus for Sarasota Home Market

SARASOTA, FLORIDA, April, 20, 2013 – Foreign home buyers from China are potent sources of strength which can contribute to the further growth of the real estate industry in Florida, Sarasota Bay Real Estate said. Their presence in the market, the full service realty firm observed, can help ease the downward pressure on home prices created by the shadow inventory of distressed or foreclosed properties. This foreclosure situation has been a disincentive for homeowners wanting to sell in order to upgrade their residences.

Manifesting this “Damocles Sword,” Florida led in U.S. foreclosure rate for the six successive months this February, according to Realty Trac. One in every 282 homes in the state has some type of foreclosure filing for the month, the analytics firm reported recently.

Why Chinese home buyers jump abroad

Recent government measures adopted in Beijing spur Chinese real estate investors to look for buying opportunities abroad.  Their market presence, in turn, could bring some support from any downward price pressure as foreclosed properties come into the Florida market. More and more home buyers from the Chinese mainland are turning abroad largely as a result of the curbs Beijing imposed on China’s residential property market. Among these restraints, described as the toughest in a year, are higher interest rates, added taxes, and increased down payment in cities where price gains have been excessive.

Major cities which had been reported as already drawing increased interest from Chinese mainland buyers include London, Vancouver, Toronto, and Singapore. These wealthy buyers typically pay in cash and were estimated to have a 20–40% share of total foreign buying in the home markets of these cities.

Foreign buyers flock to Florida

The Manatee–Sarasota MSA and other Florida metro areas can likewise attract more Chinese buyers, Sarasota Bay Real Estate said. In a recent interview with the Chicago Tribune, Florida real estate expert Jack McCabe was quoted as saying that some Chinese as well as Korean home buyers have recently made their presence felt in the state’s west coast markets. These are in addition to the traditional foreign home buyers in the area, such as those from Canada, South America, and Europe.

Historically, Florida is a major destination for foreign home buyers. The National Association of Realtors (NAR) has estimated that the Sunshine State accounted for nearly a third of the $82-billion foreign buyer market in 2011, compared to just 9% three years prior. In the Sarasota–Manatee area, the Siesta Key area is popular among home buyers from Canada, Sarasota Bay Real Estate noted.

Pluses for Manatee–Sarasota

The Sarasota–Manatee MSA has a rich potential in drawing Chinese home buyers to add to the area’s current crop of foreign buyers, Sarasota Bay Real Estate also maintained. Chinese home buyers, for one, can be drawn by the current massive efforts to elevate the Nathan Benderson Park near the golf community of The Meadows in northern Sarasota as a top international venue for paddle sports competitions or rowing championships. Notably, dragon boat racing which the NBP also hosts among other activities is a popular traditional sports activity among the Chinese.

Quite important too in the prospects of more Chinese buyers entering the local market, Sarasota Bay Real Estate said, is the international capability building which the Sarasota Association of Realtors (SAR) is actively undertaking through its Global Business Council (GBC). Part of the council’s initiatives is the development of networking events and resources to help smooth the market process involving foreign buyers and sellers.

GBC, Sarasota Bay Real Estate acknowledged, has gained much headway in its initiatives. For the second straight year, the realty firm said, the SAR body has been named as a Gold Council by the National Association of Realtors, one of the only few similar councils to have been so cited.