Canadians Find Refuge in Phoenix
Canadians find refuge in Phoenix for themselves, their money
BY DAWNA FREEMAN, FOR POSTMEDIA NEWS OCTOBER 29, 2011
Canadians have been snapping up vacation and rental properties in Arizona, enjoying nearly two years in which the loonie was rising and house prices in the region were falling.
According to Tom Ruff, market researcher at The Information Market company, Canadians have surpassed the number of Californians buying property in Phoenix, with Albertans holding the most real estate.
Rattled investors and wary pre-retirees who watched some of their money disappear in the Great Recession or wilt away in low-interest savings accounts have been leveraging Arizona’s bottomed-out housing market and America’s weakened currency to park some savings, ride out the world financial storm and wait for housing prices and the U.S. dollar to go back up.
“There are incredible bargains here relative to other parts of the States,” says Mike Orr, a real estate analyst and founder of the weekly Cromford Report on the Greater Phoenix housing market, noting Phoenix homes are one-third the price of California homes.
He says Canadians who are betting on the future strength of the market “feel they will gain additional profit from the exchange rate when the currency returns back to historical norms. That’s the Canadian advantage.”
Phoenix housing market prices plummeted 55.8 per cent from June 2006 highs and are sitting at 2000 levels.
New listing prices appear to have bottomed out, remaining relatively flat for the past two years, while inventory continues to fall across Greater Phoenix due to fewer foreclosures, lack of new construction and homeowners sitting tight until prices begin to rise.
Orr’s Cromford Report showed 26,996 active listings as of Oct. 4, compared with 44,887 active listings one year earlier, a drop in supply from 6.7 to 3.5 months.
Under four months of inventory is regarded as a seller’s market, but as Orr explains, the Valley’s inventory is skewed by price range. This downturn reflects less than a month of inventory on property at the more active lower end.
David and Leanne Fullerton started thinking about buying a pre-retirement home in Phoenix last winter.
“We thought at the time we should get in while all conditions were favourable,” said David, 49. “It was a perfect storm to buy. Stocks were at a two-year high at the end of last year, the Canadian dollar was stronger than the U.S. and we received a 40 per cent discount on the 2006 housing price.”
Although it’ll be another decade before the couple spends more than shoulder seasons in Arizona, they wanted to buy a home they could enjoy now, rent to cover homeowner expenses, and hold for future returns.
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