South Florida’s improving condo market – currently in the early stages of another construction boom – is projected to benefit from this week’s reelection of populist president – and outspoken U.S. critic – Hugo Chavez in the oil-rich South American nation of Venezuela, according to a new report from CondoVultures.com.
Despite strong support from the business sector for challenger Henrique Capriles, Chavez’s vision for creating “21st century socialism” in Venezuela garnered the former coup leader – who was later elected president in 1998 – more than 54 percent of the votes even though the nation of 28 million people has a “decaying infrastructure, increasing dependence on oil exports, and inability to control one of the world’s highest homicide rates,” according to the Washington Post.
Even before Chavez won another six-year term on Oct. 7, 2012, foreign real estate investors from Venezuela – in search of deals and a safe haven for their capital – were already purchasing about $750 million annually in Florida real estate, with nearly 90 percent of the deals in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach, according to the “Profile Of International Home Buyers In Florida 2012” report from the Florida Realtors and the National Association Of Realtors.
Now with the presidential outcome decided, a number of the estimated “200,000 Venezuelans” living in the United States expect Chavez’s election victory to “prompt a further exodus” of Venezuelans – who are “worried about the future” – to head to South Florida under investor-oriented visa programs, according to the Miami Herald.
For many Venezuelans, Miami is a place where they feel comfortable given the U.S. infrastructure, diverse population, and proximity to their home country, according to Jenny Huertas, a licensed Florida broker with CVR Realty™.
Foreign investors from Venezuela have a long history of buying residential real estate – especially condos – in South Florida.
Veteran real estate watchers, often times, cite a financial crisis in Venezuela as one of the key macroeconomic causes of Miami’s condo crash on Brickell Avenue in the 1980s.
As of late, foreign investors from Venezuela transacted an average of $62.5 million monthly on Florida real estate with condos accounting for 44 percent of the deals in a one-year period ending in June 2012, according to the Realtors report.
Single-family houses accounted for about 24 percent of the transactions, and townhouses an additional 16 percent. Another 16 percent of the Florida transactions by foreign investor from Venezuela involved commercial properties, according to the report.
As for location, nearly 75 percent of the Florida real estate transactions by Venezuelan investors occurred in “central city / urban” areas and 22 percent in “suburban” areas, according to the Realtors report.
For foreign investors from Venezuela, Miami-Dade County is the most popular destination, accounting for more than 67 percent of the Florida transactions. Broward County accounts for more than 16 percent of the Florida transactions by foreign investors from Venezuela, and Palm Beach County represents an additional four percent, according to the Realtors report.
Some industry watchers contend that foreign buyers have increased their investments in the United States – and South Florida – as this nation’s economy shows signs of gradually improving at the same time that conditions deteriorate in their home countries.
International buyers have played a major role in acquiring the excess South Florida condo inventory that flooded the market beginning in 2007 at the start of real estate crash.
Estimates are that foreign buyers acquire nearly $11 billion annually in condo, townhouse, and single-family house resales in Florida, according to the Realtors report.
In addition to resales, foreign buyers are also purchasing new condo units directly from South Florida developers – or lenders that have repossessed troubled properties – with unsold inventory from the boom that began in 2003.
At the end of the second quarter of 2012, buyers have acquired about 93 percent of the nearly 49,000 new condos created during the boom in the seven largest coastal condo markets of Greater Downtown Miami, South Beach, Sunny Isles Beach, Hollywood / Hallandale Beach, Downtown Fort Lauderdale and the Beach, Boca Raton / Deerfield Beach, and Downtown West Palm Beach and Palm Beach Island.
Foreign buyers are also playing a key role in the latest South Florida new condo boom where at least 70 towers with nearly 10,500 units are proposed as of Oct. 10, 2012, according to the Preconstruction Condo Projects list from CVR Realty™.
It is important to note there are various stages to a residential real estate transaction in South Florida.
A transaction begins when a property is made available for sale and ends when a title is conveyed from one party to another party as a result of the recording of a deed with the local government.
As part of the process, a property typically goes under contract and into a due diligence phase by which a deal can be canceled.
Condo Vultures® LLC is a real estate consultancy and marketing company based in the 225 Midtown Building at 225 NE 34th St., Suite 209B, Downtown Miami, Florida, 33137. Condo Vultures® LLC can be reached at 800-750-0517.
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