THIS IS THE FIRST OF OUR “WONDERFUL CANADIAN BUYERS” SERIES………….Take some time and read this article. If you are looking to sell your property, don’t leave out the Canadian buyers! When you think of international buyers, do you think of our neighbors to the north? You should—Canadians bought a whopping $9.4 billion of U.S. real estate last year. They make up the largest group of foreign buyers in the U.S. residential market, and they’re growing each year.
What’s driving growth? A number of factors have coalesced to make U.S. homes very attractive to Canadians:
The Canadian dollar is strong. The “loonie” has appreciated tremendously in the last decade. Whereas ten years ago it traded at about $.67USD to the Canadian dollar, recently it has been near parity and occasionally above the U.S. dollar.
Our homes are inexpensive compared to theirs. Currently, the national median price for a home in the U.S. is around $171,000, about half of Canada’s average price of $365,000. “Canadian banks didn’t loosen mortgage requirements as U.S. lenders did,” says Ray Levin of eXp Realty in Scottsdale, Arizona. “The market there didn’t experience a housing bubble. Instead, value increased incrementally, and hasn’t fallen sharply as it has here.” In fact, Canadian home prices are still appreciating, with the national average up 7.7 percent over last year.
ROI on property is higher here. It’s very hard for investors to find Canadian properties yielding high returns. On the other hand, the U.S. market, especially in vacation and retirement areas, has excess inventory that is priced 40 to 50 percent lower than it was five years ago. Canadians expect home prices here to bounce back over the long term, and see the dip as a great investment opportunity.
Canadians have strong asset positions. On average, Canadian homeowners have a 66 percent equity stake in their homes versus 45 percent in the U.S. Banks in Canada were still requiring down payments of 20 to 25 percent as our lenders began offering zero-down mortgages. Now, many Canadians have substantial equity positions against which they can borrow at low rates and invest elsewhere.
Stayed tuned for next blog about our great northern neighbors…….