Foreign Investors Boost Destin Market

A weakening dollar in the U.S. is beginning to be seen as a positive move in the Destin real estate market as foreign investors make purchases of homes and condos. The weakness of the dollar is also producing an increase in inquiries on property and may benefit the market.

Higher Canadian and European inquiries are a positive sign for the market, which has experienced a slowdown in housing sales for more than two years after record appreciation. In many cases transactions are closing at lower prices that haven't been seen in five years.

Foreign investment in the market place has increased over the last five years as the area has grown, especially from European buyers, including many from England and Switzerland. Condo and vacation home buyers may act to replace first-time buyers, many of whom have shied away from buying given the uncertainty of the economy.

However, mortgage rates have been slashed by the Fed and the Federal Reserve seems to be on a path of interest rate cuts through 2008.

The dollar sunk to record lows compared to other currencies, giving foreign investors a major edge. The new growing influx of foreign purchasers could set up the bottom for the market place, which is historically never recognized until after it has past. Studies show that only 2% of all purchasers of property buy real estate at the very bottom of market cycles. The over-whelming majority of buyers miss buying at the market's bottom.

Florida has long been an investment center for second home and vacation buyers as the leading second home market in the nation. Not many foreign investors have had much luck with purchasing foreclosures in the area since comparatively few foreclosures are occurring. More than fifty percent of all homes in the Destin area are free and clear of mortgages, according to bankers.

Home auctions have been a growing attraction for real estate investors to get the best deal possible on property. But many homes sell at higher prices when they are auctioned off in Florida than what they may have been purchased for through other means.

The inventory of homes and condos is abundant in the area, but has slightly decreased over the past few months. Sales volume has been consistent for the last quarter on a monthly basis, which is widely regarded as a sign that the market may be bottoming out. Florida entered the national real estate recession before all other states in the nation and as a consequence is likely to pull out before the rest.