2013 Survey of International Home PurchasesMiami-Dade-Broward, Florida

Conducted by NAR Research for MIAMI Association of REALTORS®

Summary of Responses

Lawrence Yun, Senior Vice PresidentJed Smith, Managing Director, Quantitative Research

Gay Cororaton, EconomistData Gathered September/October 2013

Outline of Presentation

• About the Survey and Major Conclusions• Survey Results– Experience with International Transactions– Buyer Characteristics– Miami-Dade-Broward REALTOR® Designations– Major Issues Reported by Miami-Dade-Broward

REALTORS®• Summary of Key Findings

About the Survey

• Survey Conducted During Sept 23 –Oct 11, 2013.• Questions Focused on Miami-Dade-Broward REALTOR®

Experience During Past Twelve Months.• Invitation was sent out by Miami Association of REALTORS®

to its members• Received a Total of 1044 responses.

Miami-Dade83%

Broward16%

Others1%

Area of membership of REALTOR® Respondents in Past 12 Months--2013 Miami-Dade-Broward, FL

Survey

Major Conclusions• International sales are an important niche market for a number of Miami-

Dade-Broward REALTORS.®• Survey data concerning transactions for the 12 months ended Sept-Oct 2013

indicates a slight increase in the volume of international transactions and purchases and an increase in the purchase price.

• Majority of international clients are foreign residents (Type A). Resident foreigners (Type B transactions) are also important.

• There are discernible differences between Miami-Dade’s and Broward’s international clients regarding the volume of international transactions, mode of contact , purchase price , type and area of property purchased, top tier countries of client origin, and reason for buying

• Data indicates an increase in members who have less than 5 years of experience.

• Many respondents hold designations (e.g., CIPS, CRS, GRI, BPO) and have 6 or more years of experience.

• The international market remains important though challenging for many, requiring that REALTORS® deal with financing, language and cultural issues.

Miami-Dade-Broward REALTOR® Experience with International Transactions

Most Miami-Dade-Broward REALTORS® Have Worked with an International Client in the Past 12 Months

2010 2011 2012 20130%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

75%83%

77% 77%

Percent of Miami-Dade-Broward REALTOR® Respondents Who Worked With an International Client in Past 12 Months

The 2010-2012 surveys covered South Florida.

A Larger Percentage of Miami-Dade REALTORS® Have Worked with an International Client in the Past 12 Months

Miami-Dade Broward66%

68%

70%

72%

74%

76%

78%

80%

78%

71%

Percent of Miami-Dade-Broward REALTOR®Respondents Who Worked With an In-ternational Client in Past 12 Months

Most International Clients are Non-Resident Foreigners *But Share is Lower Compared to Past Years

• Type A clients are non-resident foreigners. They reside in another country and do not plan to live permanently in the United States.

• Type B clients are recent immigrants/resident foreigners/temporary visa holders looking for primary residence in the United States.

Type A Type B Both0%

10%

20%

30%

40%

50%

60%

70%

52%

8%

39%

60%

8%

31%

44%

10%

46%

Type of International Client Purchasing in Miami-Dade-Broward, FL

2010 2011 2013

Perc

ent

of r

espo

nden

ts

50% of Miami-Dade-Broward REALTORS® Closed Six or More Transactions in 12 months ending Sept-Oct 2013

0 1 to 5 6 to 10 11 to 15 16 to 20 More than 20

2011 0.14 0.42 0.22 0.08 0.05 0.09

2012 0.14 0.455 0.179 0.098 0.057 0.07

2013 0.102 0.403 0.208 0.118 0.059 0.111

3%8%

13%18%23%28%33%38%43%48%

Total Number of Transactions, Domestic and International, Closed in Past 12 Months

Perc

ent o

f Res

pond

ents

2012: 41% closed 6+ transactions2013: 50% closed 6+ transactions

Personal Contacts, On-line Presence, and Previous Clients Are Important in Obtaining Foreign Clients

Personal Contacts

Previous Clients

Business Contact Ouside Country

Business Contact in U.S.

Online Marketing

Newspaper/yard sign

Walk-in, open house, random call

Other

41%

26%

6%

1%

15%

1%

4%

7%

44%

25%

5%

2%

14%

2%

3%

5%

How REALTORS® Get International Clients

2013 2012

Largest Source of ClientsMiami-Dade: Personal Contacts

Broward: Previous Clients

Personal contacts

Previous clients

Business contact outside of the country

Business contact in the U.S.

Online marketing

Newspaper/yard sign

Walk-in, open house, random call

Other

47%

23%

6%

2%

14%

1%

2%

5%

32%

40%

1%

1%

13%

4%

5%

4%

How REALTORS® Get International Clients

Broward Miami-Dade

38% of Miami-Dade-Broward REALTORS® Had Six or More International Clients in 2013

1 2 3 4 5 6 7 8 9

2011 0.13 0.15 0.17 0.09 0.12 0.2 0.05 0.03 0.06

2012 0.181 0.172 0.145 0.097 0.115 0.175 0.042 0.028 0.045

2013 0.092 0.143 0.153 0.109 0.123 0.22 0.073 0.028 0.059

3%

8%

13%

18%

23%

In Past 12 Months, Number of International Clients, Regardless of Whether They Purchased Property

Perc

ent o

f Res

pond

ents

2012: 30% had at 6+ int’l clients2013: 38% had at 6+ int’l clients

About One-Third of Miami-Dade-Broward REALTORS® had a Majority of Their Transactions with an International Client.

0% (None)

1% to 5% 6% to 10%

11% to 15%

16% to 25%

26% to 50%

51% to 75%

76% to 100%

2011 0.20903954802259

9

0.20762711864406

8

0.08192090395480

23

0.05649717514124

29

0.07909604519774

01

0.10734463276836

2

0.12853107344632

8

0.12994350282485

9

2012 0.238 0.216 0.082 0.039 0.082 0.126 0.102 0.114

2013 0.08 0.213 0.107 0.052 0.096 0.104 0.151 0.196

3%

8%

13%

18%

23%

In Past 12 Months, Percentage of Transactions with an International Client

Perc

ent o

f Res

pond

ents

2012: 21% had 51+% of transactions with int’l clients2013: 35%

37% of Miami-Dade-Broward REALTORS® Have Some Percentage of Their International Business That is Commercial

0% (None)

1% to 5% 6% to 10%

11% to 15%

16% to 25%

26% to 50%

51% to 75%

76% to 100%

2011 0.67563739376770

5

0.16855524079320

1

0.04957507082152

97

0.01274787535410

76

0.02407932011331

44

0.02266288951841

36

0.01699716713881

02

0.02974504249291

78

2012 0.675 0.164 0.053 0.019 0.029 0.019 0.007 0.034

2013 0.629 0.197 0.047 0.032 0.034 0.019 0.018 0.023

5%15%25%35%45%55%65%75%

Percentage of International Business That is Commercial

Perc

enta

ge o

f Res

pond

ents

Miami-Dade Has A Greater Percentage of REALTORS® Who Have Some Percentage of International Business That is Commercial

0% (None) 1% to 5% 6% to 10% 11% to 15%

16% to 25%

26% to 50%

51% to 75%

76% to 100%

Mi-ami-Dade

0.614876033057851

0.198347107438017

0.0479338842975207

0.0330578512396694

0.0380165289256198

0.0231404958677686

0.0181818181818182

0.0264462809917355

Broward

0.7 0.2 0.0454545454545455

0.0272727272727273

0.0090909090909090

9

0 0.0181818181818182

0

5%

15%

25%

35%

45%

55%

65%

75%

Percentage of International Business That is Commercial

Perc

ent o

f Res

pond

ents

42% of Miami-Dade-Broward REALTORS® Were Involved in Both Residential and Commercial Transactions

0% (None) 1% to 5% 6% to 10% 11% to 15%

16% to 25%

26% to 50%

51% to 75%

76% to 100%

2011 0.631205673758865

0.191489361702128

0.039716312056737

6

0.025531914893617

0.022695035460992

9

0.036879432624113

5

0.019858156028368

8

0.032624113475177

3

2012 0.605 0.209 0.056 0.034 0.024 0.03 0.021 0.021

2013 0.579 0.211 0.058 0.028 0.029 0.041 0.025 0.03

5%

15%

25%

35%

45%

55%

65%

Percent of International Buyers Involved in both a Residential and a Commercial Transaction

Buyer Characteristics

International Prospects Do Not Mean International Sales71% of Miami-Dade-Broward REALTORS® Had International Clients Who Did

Not Purchase a Property

2010 2011 2012 2013

62%

53% 51%

71%

In Past 12 Months, Did You Have International Clients Who Chose Not to Purchase a Property?

“Could Not Find a Property” and “Cost of Property” Were Two Major Reasons for Not Purchasing

Could not find a property to purchase

Cost of property

Loss of home country benefits

Property taxes

Insurance costs

Exposure to U.S. tax laws

Immigration laws which prevent foreigners from living in the U.S continuously year round

Could not obtain financing / Not able to qualify for mortgage

Other, please specify.

23%

14%

2%

11%

7%

10%

8%

15%

11%

28%

22%

2%

9%

5%

6%

6%

14%

9%

Why Clients Chose Not to Purchase

2013 2012

“Could Not Find a Property” Was Reported More in Broward

Could not find a property to purchase

Cost of property

Loss of home country benefits

Property taxes

Insurance costs

Exposure to U.S. tax laws

Immigration laws

Could not obtain financing

Others

26%

23%

3%

10%

4%

6%

6%

14%

9%

37%

17%

1%

3%

7%

6%

6%

15%

9%

Why Clients Chose Not To Purchase

Broward Miami-Dade

81% of Miami-Dade-Broward REALTORS® Had at Least One International Client Who Purchased a Property

0 1 2 3 4 5 6 to 10 11 to 15

16 to 20

More than 20

2011

0.305177111716621

0.170299727520436

0.140326975476839

0.114441416893733

0.0517711171662125

0.0694822888283379

0.0926430517711172

0.0286103542234332

0.0081743869209809

3

0.0190735694822888

2012

0.33 0.158 0.151 0.102 0.056 0.068 0.093 0.013 0.007 0.021

2013

0.185 0.164 0.189 0.113 0.084 0.066 0.122 0.039 0.019 0.018

3%

13%

23%

33%

In Past 12 Months, Number of International Clients Who Purchased a Property in the U.S.

Perc

ent o

f Res

pond

ents

2012: 67 percent2013: 81 percent

Median Purchase Price of a Typical Client Up in 2013

$100,000 or less

$100,001 to

$150,000

$150,001 to

$200,000

$200,001 to

$250,000

$250,001 to

$300,000

$300,001 to

$400,000

$400,001 to

$500,000

$500,001 to

$750,000

$750,001 to

$1,000,000

$1,000,001 or more

2011 0.165009940357853

0.163021868787276

0.117296222664016

0.123260437375746

0.10934393638171

0.095427435387674

0.0755467196819085

0.0675944333996024

0.0357852882703777

0.047713717693837

2012 0.14 0.14 0.138 0.115 0.113 0.104 0.093 0.065 0.041 0.05

2013 0.081 0.107 0.099 0.109 0.092 0.113 0.088 0.114 0.088 0.109

1%

3%

5%

7%

9%

11%

13%

15%

17%

Distribution of Purchase Price of the Properties Purchased by Typical Client

Perc

ent

of r

espo

nden

ts

2012 median price range: $ 200-250K2013 median price range: $300

International Clients Typically Purchased at Higher Price in Miami-Dade Compared to Broward

Miami-Dade Broward

Median Price Range of International Buyers in Miami-Dade-Broward

$ 300,000 - $ 400,000

$ 200,000- $250,000

Condominiums: The Major ChoiceDetached Single-Family of Increased Interest

Detached single-family

Townhouse/row house

Condo/apt Time-share Commercial Prop-erty

2011 0.157684630738523

0.0878243512974052

0.708582834331337

0 0.0459081836327345

2012 0.202 0.116 0.635 0 0.047

2013 0.23 0.094 0.64 0 0.037

5%

15%

25%

35%

45%

55%

65%

75%

Type of Property Purchased by Typical Client

Condominiums Are The Major Choice, But More so in Miami-Dade

Detached single-family

Townhouse/row house

Condo/apartment Time-share Commercial Property

20%

9%

67%

0%4%

36%

10%

50%

0%4%

Type of Property Purchased by International Client

Miami-Dade Broward

Commercial Purchases Concentrated in Retail and Multi-Family Properties

Office Industrial Retail Hotel Land Multi-family

2011 0.170731707317073

0.182926829268293

0.23780487804878

0.0853658536585366

0.0182926829268293

0.304878048780488

2012 0.206 0.165 0.17 0.028 0.037 0.394

2013 0.207 0.112 0.235 0.045 0.056 0.346

3%

8%

13%

18%

23%

28%

33%

38%

43%

Type of Commercial Property Purchased by Typical Client

Next to Multi-family--Miami-Dade: Retail Property

Broward: Office Property

Office Industrial Retail Hotel Land Multi-family

21%

9%

25%

5% 5%

35%

23%

15% 15%

4% 4%

38%

Type of Commercial Property Purchased by International Client

Miami-Dade Broward

70 Percent of Miami-Dade-Broward REALTORS® Report that Fewer than 10 Percent of International Clients Obtain a Mortgage

0 - 9 % 10 - 19%

20 - 29%

30 - 39%

40 - 49%

50 - 59%

60 - 69%

70 - 79%

80 - 89%

90 - 100%

2012 0.721 0.064 0.039 0.037 0.022 0.05 0.013 0.02 0.007 0.028

2013 0.695 0.073 0.046 0.039 0.027 0.043 0.011 0.016 0.011 0.039

5%

15%

25%

35%

45%

55%

65%

75%

Percent of Transactions With a Mortgage

Perc

ent o

f Res

pond

ents

Most Buyers Purchased Property in aCentral City/Urban Area

Central city/urban area Suburban area Small town/rural area Resort area

2011 0.633333333333333 0.191666666666667 0.00833333333333333

0.166666666666667

2012 0.638 0.195 0.007 0.16

2013 0.662 0.197 0.009 0.131

5%

15%

25%

35%

45%

55%

65%

Predominant Area in Which Typical Buyer Purchased a Property

Most Buyers Purchased Property in aCentral City/Urban Area, More so in Miami-Dade

Central city/urban area

Suburban area Small town/rural area Resort area

69%

16%

1%

13%

51%

36%

1%

12%

Predominant Area In Which Typical Buyer Purchased Property

Miami-Dade Broward

The Top Tier Countries of Client Origin

Venezuela

Argentina

Brazil

Colombia

Canada

France

Mexico

Italy

0% 2% 4% 6% 8% 10% 12% 14% 16%

15%

13%

12%

8%

9%

4%

4%

3%

14%

11%

11%

8%

8%

5%

4%

4%

Distribution of Responses Regarding Countries of Origin of International Clients Who Purchased Property

20132012

The Second Tier Countries of Client Origin

Respondents also reported international purchases from these countries:

Peru RussiaSpain Dominican RepublicUnited Kingdom Chile Ecuador GermanyChina Costa RicaHonduras NicaraguaIndia PanamaOthers, not identified

Miami-Dade and Broward Top Tier Countries of Client Origin

Venezuela

Argentina

Brazil

Colombia

Canada

France

Mexic

oIta

lyPeru

Russia

Spain

Dominican Republic

14%12% 12%

8% 7% 6% 5% 4% 3% 3% 3% 3%

Miami Dade: Top Countries of Client Origin

Venezuela

Canada

ColombiaBra

zil

Argentina

United Kingdom

Italy

Peru

China, People's

Republic

Dominican Republic

14%

11% 10% 9% 7%5% 4% 4% 3% 3%

Broward: Top Countries of Client Origin

The Second Tier Countries of Client Origin

Respondents also reported international purchases from these countries:

Miami-Dade : Chile , Ecuador, United Kingdom, GermanyHonduras, China , Nicaragua , Costa Rica, India, Others

Broward: Costa Rica, Ecuador, France, Russia, Spain, Germany, Mexico, Australia, Chile, Panama, Japan, Nicaragua, Portugal, Others

REALTOR® Expertise and Comments

57% of Miami-Dade-Broward REALTORS® Have 6+ Years of Experience

Less than 1 year

1 to 5 years 6 to 10 years 11 to 15 years 16 to 20 years 21 years or more

2011 0.100828729281768

0.222375690607735

0.323204419889503

0.133977900552486

0.069060773480663

0.150552486187845

2012 0.11 0.228 0.303 0.158 0.074 0.126

2013 0.209 0.233 0.249 0.126 0.075 0.108

3%

8%

13%

18%

23%

28%

33%

Years of Experience as a REALTOR®

2012: 66% had 6+ years of experience2013: 57% had 6+ years of experience

Miami-Dade Has A Greater Percentage of REALTORS® With Less than 1 Year Experience

Less than 1 year

1 to 5 years

6 to 10 years

11 to 15 years

16 to 20 years

21 years or more

22%

23%

25%

11%

8%

11%

16%

24%

25%

19%

5%

11%

Years of Experience as a REALTOR®

Broward Miami-Dade

Designations Held by Miami-Dade-Broward REALTOR® Respondents in the 2013 Survey

CIPS

SIOR

CRS

GRI

ABR ABRM

BPO

TRC

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

16%4%

2%5%

17%3%

17%9%

4%4%

15%12%

24%44%

Percent of REALTOR® Respondents Having Designations

41% of Miami-Dade-Broward REALTORS® Reported an Increase in the Percentage of Clients Who Are International

Increased Stayed about the same Decreased Not applicable, have been in business less

than a year

2011 0.486211901306241 0.343976777939042 0.0856313497822932 0.0841799709724238

2012 0.45 0.407 0.063 0.079

2013 0.409 0.353 0.059 0.179

5%

15%

25%

35%

45%

55%

Changes in the Percentage of Clients Who Are International in Past Year

REALTORS® Reported Exchange Rates as Important in Affecting the Demand for U.S. Property

Not much of an effect Moderate effect Very significant effect

2011 0.127536231884058 0.4 0.472463768115942

2012 0.21 0.43 0.36

2013 0.2 0.432 0.369

3%8%

13%18%23%28%33%38%43%48%

Effect of Exchange Rates on International Clients

Profitability of Investment and Location Noted as Most Important Factors In Purchasing a Miami-Dade-Broward Property

a secure invest-ment (safety rea-

sons)

a profitable in-vestment (yields

income)

a desirable loca-tion (for vacation,

visits, etc.)

Other, please specify.

2011 0.40398293029872

0.347083926031294

0.20199146514936

0.0469416785206259

2012 0.274 0.342 0.337 0.046

2013 0.28 0.377 0.314 0.028

3%8%

13%18%23%28%33%38%43%

Most Important Factor Influencing a Purchase by an Interna-tional Client of a Miami-Dade-Broward, FL Property

Most Important Factor For Purchase Miami-Dade: Profitability of Investment

Broward: Desirable Location

31%38%

29%

3%

16%

36%43%

4%

Most Important Factor Influencing A Purchase

Miami-Dade Broward

Major Comments Reported by Miami-Dade-Broward REALTOR® Respondents in the 2013 Survey

• Miami-Dade-Broward is perceived as a highly desirable for location and investment purposes.

• Costs of paying Home Owner Association fees, property taxes, and mortgage insurance are a concern for foreign buyers.

• Access to U.S. financing is difficult; although most buyers pay cash, REALTORS® may need to discuss credit issues with some potential buyers.

• Immigration requirements are a concern to some prospective buyers. • Some potential international investors were reported as not being able to

buy property because of the low inventory of available homes. • Language and diversity of cultures can be issues in completing transactions.

– Diversity of expectations between potential purchasers and U.S. customs.– Language capabilities important.

• Some REALTORS® noted an increased need for substantial expertise, knowledge, and professionalism in dealing with international clients.

Summary

• International Sales are a Significant Market for Miami-Dade-Broward for location and investment purposes

• Survey data indicates an increase in the volume of international transactions and purchases in the 12 months ending Sept-October 2013:

-an increase in the percentage of REALTOR® respondents having 6+ international clients (38% in 2013 vs. 30% in 2012)

-an increase in the percentage of REALTOR® respondents with 51%+ of their transactions as international (35% in 2013 vs. 21% in 2012)

-an increase in the percentage of REALTOR® respondents who had at least one international client who purchased property (81% in 2013 vs. 67% in 2012)

• The majority of clients are Type A (foreign residents), but the share declined; only 67 percent of respondents reported Type A clients compared to about 72-76 percent in the 2010 and 2011 surveys.

Summary, Continued

• The price paid by a typical client increased; the median price in 2013 is about $ 300,000 compared to the median price range of $ 200,000- 250,000 in 2012.

• Buyer characteristics - Venezuela, Argentina, Brazil, Colombia, and Canada accounted for 52

percent of reported international purchases;- Condominiums were more preferred than single- family homes,

accounting for about 64 percent of purchases ;- Mortgage financed purchases accounted for a minor portion of

international sales • Many contacts are initiated via personal relationships.

– Although personal contact is most favored, online marketing is increasing.– For REALTORS® with only an occasional sale, some study of foreign cultures

and customers can help to bring the transaction to a successful closure.

Summary--Continued

• Most Miami-Dade-Broward REALTOR® Respondents Have International Expertise and Experience– Respondents reported having a variety of designations indicating

specialized expertise. – Approximately 57 % of respondents reported being in business

for more than 5 years compared to 66% in the 12 months ending Sept 2012.

• International sales market presents unique challenges.

- Learning another language can be an advantage. - Personal contacts/referrals are necessary to building an international client base.- Familiarity with tax /immigration/financing regulations is important.- Foreign clients are discouraged by additional costs such as HOA and insurance fees, so helping the client understand the rationale for these costs is critical.

End of Presentation. Thank you.