Low U.S. home prices, high loonie make it a good time to be a Canadian snowbird
TORONTO – Aug. 6, 2010 – Mary and Ron Ethier long believed a getaway home in the Florida sun would remain a retirement dream, but when a recent real estate turnaround opened the border to a growing flock of snowbirds, the couple suddenly saw an opportunity too tempting to pass up.
“We just felt with the prices that were happening down there, that it was out of our reach financially,” said Mary Ethier from her home in Pembroke, Ont. “But when their real estate market basically took a big hit and the Canadian dollar came up, we thought if we’re ever going to do it, now’s the time to get off our butts and go and do it.”
The couple, too busy with their lawn-care franchise to enjoy Ontario summers, toured homes in the Fort Myers, Fla., area in the fall of 2007 and made a lowball offer, expecting to negotiate, but instead found their deal accepted.
By January, they owned a condo in a gated community, a property foreclosed upon when the U.S. housing bubble burst and home prices began to plummet and many American homeowners realized they could no longer pay their mortgages.
The loonie has since risen to hover around parity while U.S. home prices have stagnated, creating new financial incentives for Canadians to act fast and scoop up American real estate deals.
“It’s a once in a lifetime opportunity for Canadians,” says Mark Dziedzic, a Canadian Realtor with Cross Border Realty and a snowbird himself.
The Sun Belt states of Texas, Arizona, California and Florida are favorites, while there are also deals to be had in Nevada and Georgia. The average price of a home in Phoenix, Ariz., is US$144,600, compared to $432,253 in Toronto.
“People are buying $40,000 to $50,000 condos in Phoenix right now. Condos (in Toronto) are selling for $400,000 to $500,000,” Dziedzic said. Taxes, condo fees and closing costs are also generally less expensive in the U.S., he added.
Prices in most U.S. regions have steadied after falling for three years, but a high number of foreclosures persist, lowering prices, especially in Florida and Nevada, said Bank of Montreal mortgage specialist Laura Parsons.
“This is the time to buy if you’re going to,” she said.
“I think you’ve got to look at this as a long-term investment because you’re getting such a deal. You’re going to have to hang on to it for a while,” and ride out any further downturns before the market picks up again, she said.
There is a fine balance between rushing to buy and waiting for lower prices. Economists predict the U.S. housing market will remain soft, but it’s futile to make decisions based on where a currency or a housing market is going.
“I don’t think you need to rush down and get a place, but the good stuff in the lower price range ... those are moving. The good ones come up and they’re sold,” Dziedzic said.
Buying real estate in the U.S. is becoming easier for Canadians as more snowbirds snap up getaway homes. But experts caution that the buying process, which takes about three to four months, is a different beast.
© The Canadian Press 2010