Reader Michael asks, “Why are we Seeing an Influx of Canadian Buyers in the Phoenix Real Estate Market?”
Maybe because it feels like it’s -60 in Saskatoon?
While that seems like a plausible answer, I say it of course in jest. It’s cold every winter in Saskatoon.
So what has changed?
The value of the Canadian Dollar in comparison to the US Dollar.
From this chart, you can see one Canadian Dollar (the Loonie) was worth $0.85 USD in March 2007. Today that same Loonie is worth $1.00 — a 15 percent increase in the value of the Canadian dollar.
In short, dollars in Canada are worth more (in term of US currency) than they were a few months ago — there is increased purchasing power for our friends up north.
That, combined with generally declining prices in the Phoenix real estate market, and yes — our typically warm winter weather, attractions, and strong economic outlook — makes investing in real estate attractive to many Canadian buyers.
Is buying real estate in the US right for all Canadians? Of course not. It’s not always the right time to buy for anyone. But in the right situations, it certainly might be.
Additional info:
Do Canadians Need a Visa To Purchase US Real Estate?
Financing Options for Canadians Buying US Property
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[tags]Canadian dollar, Buying US real estate[/tags]
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Sounds like a great deal. Someone who wants to buy and has the money. We have a lot of Canadian people here in Florida. They come from November to January most every year. This are has come to feel as though they are family and everyone anxious to see each other again. I hear many are buying in SW Florida.
-60 does take some getting used to.
The price of a home in Saskatoon has doubled in the last few years, yet speculators continue to seek opportunity here. I’m telling them to think south.
Is it realistic to expect a positive cash flow on a single-family home or a condo with 25-30% down in Phoenix?
Can a buyer find a good quality property manager to look after his real estate?
What are vacancy rates like in Phoenix for rental property?
Thanks Jay!
Norm –
I think yes, with a 25 – 30% down, positive cash flow is realistic. Rents seem to be dropping (along with prices). It is of course very dependent on the location.
There are many good property managers in the Phoenix area. Some will only manage in certain parts of town (Phoenix is very spread out). In fact, I might question a PM willing to “manage anywhere”…. The better ones are very familiar with the needs of out-of-area owners. We don’t do property management, but I can sure get you some contacts if/when you need them.
I don’t have any good vacancy data, but I’ll sure look for some. There are a LOT of empty houses sitting about, but the question is how many of those are actively seeking tenants. Seems many homeowners don’t want to deal with renting out, so they just let their homes sit vacant while they attempt to sell them. It can be hard to find tenants in outlying parts of the metro area. Closer in to town doesn’t seem to have a problem.
I read an article a few weeks ago about an increase in Canadian investors and investors from all over the world. When you look at the value of a dollar increasing say .15 it doesn’t seem like it would be worth traveling thousands of miles for an investment but if you multiply that by a couple hundred thousand you’ve got yourself a healthy down payment and a break-even/cash flow property. Throw in warm weather, a healthy economy and good infrastructure and you’ve got an investment worth traveling for.
I have a couple of Canadian Clients from the western part of Canada. Home prices are much like Los Angeles- an 1800 sqft home will cost you 500K plus and their economy is booming. Buying a vacation or second home in Arizona is very appealing. In the Johnson Ranch area, homes are going for less than 100K for about 1400-1500 sqft. So with the Canadian dollar about par to the American dollar- it is very appealling. I am marketing my listings to Canadian agents too. I is a great niche market.
Could not of been better timed for me to read this post. I have been in touch with 2 buyers this week from Canada and both of them are interested in Santa Barbara because the winters are just too long and the Canandian dollar is strong agains our WEAK dollar. I will be interested to see if this continues. Santa Barbara, and Phoenix areas are both places that people in the north would love to come to at least part time.
Thanks for the timely post.
take care
Were seeing a large influx of buyers from Canada here in Tucson Arizona, buying second homes, and retirement homes. I think you hit the nail on the head their currency had done well against ours, pricing in a discount plus our market is down significantly from 2005 highs, and throw in the oil shale project that is enriching Canadians and they can cross the border and buy Arizona real estate for a heavy discount. I recently read where the oil shale is being mined land prices that were $20 a acre just 3-5 years ago oil companies are now currently paying $2000-$3000 an acre for them to get at the shale. Canada has the world’s second largest provable oil deposits just behind Saudi Arabia even though Canada’s is much harder to produce. I expect this demand from Canada will stay pretty constant as long as oil stays high and their currency stays close to on par with ours.
Yep it’s official the Canadians are here! I was just coming home and as I got out of the car I noticed a car slowly driving up the street, stopping at the all the for sale signs. So I stopped him and asked him if he was looking for Foreclosures because I have the list. He said not necessesarily, I’m from Canada looking for a winter home. I told him it was his lucky day because I’m a realtor and know of some fabulous properties. So, I sold him a great REO with a pool for $125k. He’s so happy!
Jay, great minds think a like. I put up a post on the 7th about the influx of Canadian buyers to areas like Las Vegas and Phoenix. They are partly responsible for the gains in our market. Bad news for us doesn’t mean bad news for everyone. Considering how well the Euro is doing, Europeans shouldn’t be too far behind.