The nation is in the throes of a housing downturn that is shaping up to be the worst in a generation. Could immigration be the answer for South Florida’s hard hit real estate market? It depends on whom you ask.
Major universities studying the issue paint a bright picture of Florida, while local brokers digest such data with a hefty dose of skepticism. Most agree that the long-term impact of immigrants are positive, but how long-term is remains to be seen.
Whatever side of the immigration fence you stand on, the Joint Center for Housing Studies of Harvard University’s “The State of the Nation” report released last month offers some hope for the future: the population is still growing and people always need somewhere to live.
What’s more, in past housing busts cities with large immigrant populations recovered more quickly than others. That puts South Florida cities in a stronger position than most other parts of the nation.
From 2010 to 2020, the number of households in the United States will grow by an average of more than 1.4 million per year, the study found. And in Florida, where net domestic migration is already strong, international migrants are lifting population growth.
Indeed, Florida has long benefited from foreign investments from Latin America and, more recently, from Europe. Those investments may be more vital in the months and years ahead.
To a great extent, those investments – coming from institutional investors as well as from people looking to relocate to the U.S. and choosing Florida as the most natural entry point – have helped maintain our economy strong despite severe downturns in the past, said attorney Francisco J. Gonzalez, director of the International Services Group at the law firm of Adorno & Yoss in Miami.
But foreign investors are one thing. What about immigrants?
“Immigrants have helped soften the blow that the current downturn in the economy and the effects of the credit crunch and the subprime crisis have dealt to the country in general and to our state in particular,” Gonzalez said.
If observers are correct in their figures, the expected increase in immigration – and its associated investments – will definitely help slow the expected further deterioration in the housing market and substantially help in speeding up its recovery, he said.
David Plotkin, a top producer at Barclays International Realty Inc. in Palm Beach, isn’t so sure observers are correct in their figures. He looks at the immigrant issue through a different lens.
Most immigrants who come to South Florida, he said, are likely to rent for many years before they buy as they work to save down payment monies.
As Plotkin sees it, immigrants are coming to the United States to have a better life. Many are poor and while they are infusing money into the South Florida economy, they are doing it as renters and consumers, he said.
“Maybe in the long-term immigrants will have an impact because many will work hard, do well and live the American dream,” Plotkin said. “But short-term, I don’t see any impact at all. We’re at least 10 years away from seeing positive impacts on the South Florida real estate market from new immigrants.”