Oh, Canadians, why are you buying fewer Phoenix homes?
Canadian homebuyers are retreating from metro Phoenix. It’s “for sure.”
The number of Valley houses purchased by people north of the U.S. border has fallen by half during the past year.
And a growing number of Canadians who bought houses in the region during the past five years are getting out of the market.
“Canadians are now doing more selling than buying in the Valley now,” Arizona State University housing analyst Mike Orr said.
His research for ASU’s W.P. Carey School of Business shows less than 1 percent of all houses sold in August went to Canadians.
Three years ago, Canadian buyers were behind almost 5 percent of metro Phoenix home sales.
The current exchange rate is a big reason fewer Canadians are buying Arizona homes. And why more are selling for a profit.
In 2010, the Canadian dollar, nicknamed the loonie, started trading higher than the U.S. dollar. But last year, as oil prices began to fall so did the loonie. Canada’s economy is closely tied to the energy sector. Now, the loonie is trading at about 77 cents to the U.S. dollar.
“With the Canadian dollar so weak against the U.S. dollar, many Canadians are cashing in,” according to Diane Brennan, a real-estate agent with Phoenix’s Berkshire Hathaway Home Services and host of KTAR radio’s “That Real Estate Show.”
“Those that bought in 2010 and 2011 are making a ton on appreciation and then making 25 to 30 percent on the exchange,” said Brennan, who is from Canada and works with many buyers from there.
She told me a Canadian friend of hers recently sold an Avondale home and made $80,000 in U.S. dollars on it. But because of the exchange rate, that became a $104,088 profit in Canadian dollars.
Brennan doesn’t expect the trend of Canadians selling Valley homes to slow this year because oil prices remain low.
Canadians helped start metro Phoenix’s housing market recovery when they began finding foreclosure deals and buying in late 2009. Then most other buyers weren’t in the market.
“Canadians aren’t feeling as wealthy as they did a few years ago,” Orr said.
But Canadians who bought during the crash are now selling for bigger profit than U.S. investors, thanks to the current lows of the loonie.
Not a bad deal, eh?
Provided by: azcentral.com
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