The strong loonie is sending Canadians to Arizona and they are snapping up second homes in the U.S. Sunbelt, thanks to a strong Canadian dollar and a growing number of foreclosures in cities such as Phoenix. A Family from Calgary, Alberta, took just four days to finalize a $170,000 purchase of a home in Surprise, Arizona.
For the Calgary Herald On a sunny fall morning, in an Arizona city lined with palm trees and desert shrubs, the family from Alberta enjoy a few cold drinks in the backyard of their new home. They purchased the four-bedroom bungalow last January in Surprise, a stuccoed suburban community northwest of Phoenix. The abundance of nearby golf courses — coupled with sunny skies, box store shopping and even the odd Calgary Flames-Phoenix Coyotes match at the nearby NHL arena — made buying the home a simple decision. The price tag didn’t hurt, either. The Albertans scooped up the four-year-old home for $170,000, less than half of its original value and a fraction of what they’d pay for a similar property north of the border. “The experience for us was rather simple,” says the Albertan, “When we saw this house, we decided this was the house we wanted.”
This family is among a growing group of Canadian buyers taking advantage of U.S. mortgage turmoil — and a Canadian dollar hovering around par with the greenback — to buy investment properties and winter homes at bargain-basement prices in Arizona’s Valley of the Sun. Arizona real estate officials say the droves of Canadians purchasing homes have surpassed Californians this year as the top out-of-state buyers of Phoenix area Phoenix-properties. Canadians who chose to buy in Arizona like other U.S. markets, the desert state’s real estate values escalated wildly in 2005 and 2006. Property was scarce and prices were high. When the global financial meltdown hit, the market screeched to a halt. As unemployment rose, housing prices collapsed and foreclosed homes flooded the listings. In September, foreclosures in the Phoenix area hit a six-month high, accounting for almost half of real estate transactions. While Canadian homebuyers dish out about $400K for a single-family home, the average resale price in the desert city hovers around $135,000. The battered Arizona real estate market was dealt another blow last week when the state’s largest home mortgage lender, Bank of America, announced a moratorium on bank-owned home sales in the wake of criticism over the way it processes foreclosures. Amid the turmoil, the presence by Canadian house hunters is welcome, says the head of the state’s real estate regulator. “From 2007 forward, we’ve been experiencing a lot of challenges, a lot of changes in our marketplace,” says Judy Lowe, commissioner of the Arizona Department of Real Estate. “Our Canadian buyers coming in and buying property have been a real blessing for real estate in Arizona.”
Canadians interviewed shared they were here looking for homes and making offers… at times only four homes before making an offer, then it took just four days to close the deal. “We didn’t negotiate, we just paid the asking price,”. Selling cheap homes to Canadian buyers is a “condition of the market.” “The unemployment in Arizona is high, and when you owe more on your property than it’s worth, that creates hardships,” Lowe says. “We would like to think those properties were not worth 50 per cent of what the owner paid for it, but that is a condition. Reality mandates that we face that condition, and that we just pray for buyers who will come in and take those properties off the market.” Canadian snowbirds aren’t the only ones being lured south of the border, but many of the homes Canadians are stepping in to buy are short sales, a scenario in which the sellers put the property on the market for less than what they owe on it, with the bank’s permission, to try to ward off foreclosures. In the Phoenix area, Canadians are going to their bank, taking out a home equity line of credit, cashing in on that, coming down here and paying cash for a homes. Unlike many of the neighbours on the streets they’re buying condos from, they’re investing in home improvements. With the Canadian dollar flirting with parity, the time seems right to make their move.
If you or anyone you know is looking for a home in beautiful Arizona, please give Joyce Hazen of Long Realty, a call @ 602-284-9822 -e-mail: JoyceHazen@cox.net