Canadians surpass Californians this year as top out-of-state buyers of Phoenix-area real estate. The Canadian dollar is gaining, up from an average of 80 cents on the U.S. dollar in 2005 to 97 cents last week. At the same time, home prices in the Phoenix area have dropped about 50% from their peak in early 2007.
“Parity in currency and falling home prices,” says Gregory Tsujimoto, senior consultant at John Burns Real Estate Consulting in Irvine, Calif. “Things have really lined up” for Canadian buyers, he says.
Florida, California and Texas remain the top destinations for international homebuyers, but Arizona is gaining.
Canadian homebuyers in Phoenix’s Maricopa County made up a larger share than California buyers for eight of the past nine months, according to the Information Market, a Phoenix real estate data firm.
A Canadian flag often flies outside Shea Homes’ new Encanterra development in San Tan, south of Phoenix, and in one development in nearby Mesa, five homes on one street are owned by Canadians, Tsujimoto says.
Property management companies and real estate firms target Canadian investors and services. Canadian Arnold Porter and his wife, Maureen, a dual U.S. and Canadian citizen, have launched Arizona for Canadians, a real estate services company that helps Canadians find homes and line up financing.
“Most lenders won’t give financing because Canadians have not established U.S. credit and you can’t borrow from Canadian lenders on U.S. property,” Arnold Porter says.
Porter has found some U.S. lenders who will work with Canadians, but most of those buyers still pay cash. About half buy for investment, capitalizing on soaring demand for rental housing in Arizona because so many families are losing their homes to foreclosures. Other Canadian buyers want vacation homes.
Julie Harvey, 38, a commercial banker and mother of two, lives in Vancouver, British Columbia. Originally from Newfoundland, she vacationed in Florida every summer growing up. When she and her husband, Tony, 40, decided to buy a second home, they set their sights on Arizona.
The Harveys paid $130,000 cash for a 1,400-square-foot home in Anthem, an unincorporated area north of Phoenix. They plan on vacationing there at least twice a year and let friends and family use the home.
“What attracted us to Arizona was sports,” she says. “Year-round baseball, hockey and football. All those things together with the weather. … There are no risks of natural disasters.”
Florida has hurricanes, which have jacked up homeowners’ insurance rates. In California, where earthquakes are a threat, areas that offer the greatest housing bargains are not vacation spots — Riverside and Fresno.
Florida still gets plenty of buyers from Canada and Latin America, say Freddie Molson and Janet Russell, who run Prudential Florida Realty in Boca Raton. “A condo on the ocean,” Molson says. “It’s the water and the golf courses that are the attraction.”