MIAMI — It’s a scene that’s played out countless times here in recent years.
A working-class couple identify a home they want to buy, they work with their bank on a mortgage and prepare an offer, only to find that the property’s been purchased by a foreigner who plunked down a full cash payment.
“That’s happened to every Realtor in Miami,” said Adrian Foley, a lawyer and real estate agent.
That situation is partly why Miami has become one of the most expensive cities in the U.S. to buy or rent a home. Lured by the beaches or the relative security of the American real estate market, people from around the globe have flooded the area in recent years.
Every time the Argentine or Brazilian economy takes a plunge, Miami real estate agents see a wave of people flying north looking for a safer place to invest their money. Whenever global oil prices fall, Russians and Venezuelans start showing up. Vacationers from Europe buy properties to serve as winter retreats.
“And there’s now for the first time quite a lot of activity coming from Asian buyers, especially Chinese,” Foley said.
One clear indication of foreign purchases is the number of Miami homes being bought with cash. As much as 70% of total home purchases in the Miami area were cash sales in March 2012, according to real estate research firm CoreLogic. That was down to 58% in December, but still well above the national average of 35.5%.
Miami still remains relatively cheap for buying prime property.
“They are very inexpensive compared to other places in the world, be it Buenos Aires, Bogota, Paris, Germany, Russia,” said Alberto Orso, a Miami real estate agent who works with many Latin American buyers.
Another factor has been a strong push from city leaders and developers to cultivate a global, cosmopolitan environment that attracts a wide variety of wealthy foreigners.
Christie’s International Real Estate listed Miami among its top 10 luxury markets in 2014. Flip through the April edition of American Airlines’ in-flight magazine and there are several Miami-area developers advertising their properties, one even promoting it as a place to buy and immediately rent out as an investment.