Canadian real estate investors have long been one of the largest groups purchasing homes in the U.S. During the recent economic downturn, Canadians found themselves in a unique position as their currency value inflated and U.S. home prices deflated. Canadian buyers increased their influence on the Seattle real estate market and markets across the country.
Realtor Magazine reported on this effect as Canadians buying real estate here had become such a large influence--up to 24% of the entire foreign buying market. Canadians were investing in American homes this past year at twice the rate they were buying near the peak of the market.
It seems that as American housing markets start to recover and the bargain-basement prices cease to exist, the Canadian fervor for U.S. dirt has also started subsiding somewhat. Currencies seems to be sliding back to more equitable levels, and the lack of inventory in most major American metros has created far more competition for well-priced homes. These homes can be much more difficult for a foreign investor to purchase, especially in multiple-offer situations. Home sellers will many times feel that a local buyer is more likely to proceed to a successful closing, as opposed to an unknown foreign buyer that may or may not have actually visited the property. Foreign investors still can trump those American offers in some situations, though, with all-cash purchases.
This isn't to say that Canadian purchases of U.S. real estate is swinging heavily downward. Our neighbors to the North will certainly continue to be our major foreign investor going forward. The shift has just been reached in recent months that makes buying a home in the U.S. a good deal--not necessarily the amazing bargain that had been available a few years ago.
From Realtor Magazine:
Canadians have had a big appetite for U.S. properties in recent years while housing values in many markets across the U.S. took a tumble. But now as many housing markets pick up, bargain-hunting Canadians see opportunities closing and are rushing to take advantage of investment or getaway properties before these properties inch even higher, CBC News in Canada reports.
Canadians account for 24 percent of foreign home buyers in the U.S. — the largest share — and Canadian buyers account for more than double the rate they did in 2007, according to data from the National Association of REALTORS®.
“As the U.S. market tanked over the past couple of years, some Canadian buyers took advantage of an especially fortuitous confluence of events — a dollar that had moved up to par, deeply-discounted asking prices, and little competition from an economically battered U.S. populace,” CBC News reports. “Many Canadians who bought in the U.S. even a few months ago are starting to see a return on the investment, but those who are still contemplating a purchase need to tread carefully.”
But with falling inventories in the U.S. and rebounding home prices, Canadians are seeing the bargains slipping away, particularly in the two states where they tend to be the most active — Arizona and Florida.
Canadians are finding themselves in more multiple-bid situations in these recovering states and paying more than what they would have a few months ago.
© Seattle Homes, LLC: - Sam DeBord, Managing Broker, Realtor
Coldwell Banker Seattle: Coldwell Banker Danforth & Associates
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Data Source: NWMLS - The Northwest Multiple Listing Service did not compile or publish this information.
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