There are no reliable estimates of the number of vacation homes in Florida. The number is considerable, however, as Florida remains the number one vacation destination in the United States. Vacation properties include single-family homes, condominiums, and timeshares. Sales of vacation homes have been extraordinarily strong in recent years, thanks to low interest rates and a weak dollar, which has helped fuel purchases from overseas.
The final way the aging of the baby boom generation is driving home ownership higher is its impact on boosting overall homeownership. The overall homeownership rate for the U.S. is currently 68.6 percent, yet the rate for persons aged 45 to 54, which is precisely where most of the baby boomers are today, is 77.2 percent. Moreover, the homeownership rate rises with the next two age cohorts, rising to 81.7 percent for those aged 55 to 64 and 83.2 percent for those ages 65 and over. With more people in their peak homeownership years, overall homeownership has risen dramatically, climbing from around 65 percent, which it averaged from the mid-1960s to the mid-1990s, to around 69 percent today.
Florida's homeownership rate has risen even faster than the nation's, reflecting the state's older median age, stronger job growth, and historically affordable home prices. More than 40 percent of Florida's population base is in their peak home buying years, age 45 and over, compared to just 35 percent nationwide. Moreover, well over half Florida's projected population gain over the next 25 years, which will total 8.1 million persons, will be age 45 and over, which means the state's homeownership rate will continue to trend higher. 6 We estimate that Florida homeownership rate will top out at around 77 percent twenty-five years from now. Given that Florida is expected to add more than 3.2 million households over this period, homebuilders will need to build nearly at least 4.2 million more homes, townhouses, condominiums and apartment over the next 25 years.
The fifth factor driving Florida's housing boom is strong demand from overseas buyers, particularly from Europe and Latin America. The National Association of Realtors estimates that international buyers accounted for 15 percent of Florida's total home sales during 2004. According to the NAR data, nearly 58 percent of these buyers come from Europe. The United Kingdom alone accounts for one-third of all international buyers. The rest of Western Europe accounted for 21.2 percent of international purchases. The bulk of those purchasers come from Germany. Eastern European nations accounted for another 3.0 percent of international sales.
Buyers from Latin American countries and the Caribbean accounted for 29 percent of Florida's international sales. The largest contingent of Latin American buyers come from Venezuela, and account for about 7 percent of Florida's international sales. The remaining Latin American buyers primarily come from Brazil, Argentina, Columbia and Chile. Canadian buyers also make up a significant share of Florida's international sales, accounting for 7.1 percent of the total.
Nearly one third of international purchases of homes in Florida were for properties in the Miami-Fort Lauderdale area. Another third chose locations in Central Florida, including Orlando, Lakeland-Winter Haven, and the Tampa-St. Petersburg area. Southwest Florida, which includes Naples, Fort Myers, Port Charlotte, Sarasota and Bradenton accounts for another quarter of international sales.
Buyers' preferences vary considerably by nationality. British buyers, for example, tend to prefer purchases of detached, single-family homes. The Orlando area is the top choice for British home buyers, followed by the Naples-Fort Myers area and Tampa-St. Petersburg-Clearwater. German buyers also have a greater preference for single-family homes, but show a proclivity toward townhouses. The top destination, by far, for German investors is Southwest Florida, which accounts for close to 60 percent of all purchases. The second most popular choice for German buyers is South Florida, which accounts for 18% of all purchases.
Homebuyers from Venezuela overwhelmingly prefer to purchase condominiums, and mostly in Miami and Fort Lauderdale, which accounted for 68% of all Venezuelan purchases in Florida. The next most popular locations for Venezuelan buyers are Orlando and West Palm Beach.
Canadian home buyers have the most balanced view on Florida, with purchases spread throughout the state. The Naples-Fort Myers area is the top choice, closely followed by the Tampa-St. Petersburg-Clearwater area, Sarasota, Miami-Fort Lauderdale and West Palm Beach. Canadians, who tend to spend longer periods of time in the state than visitors from most other regions of the world, generally prefer to purchase condominiums or townhouses.
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