Various reports projecting recovery of the U.S. housing market is indeed good news for Americans, who have long been suffering from foreclosures.
But for Canadians investing in the U.S. market, realty experts believe that an increased competition in a low inventory market will limit their prospects.
"The buyers who have secured their investments before this improvement in the market are, in many areas, seeing their property values rise," Marnie Bennett, real estate broker and founder of Benett Property Shop Realty, said in a statement. "The market is in recovery, but it has not yet recovered. For this reason, I encourage anyone considering investing in US real estate to make their move soon. Over time, the rising prices will cut into the profit margins that investors need to make the purchase worthwhile."
Traditionally, Florida and Arizona have attracted increasing number of Canadians, who have bought properties here to escape the harsh Canadian winters. According to a 2011 National Association of Realtors’ report, the U.S. has had a good number of Canadian buyers focusing on properties in Arizona, California, Florida and Texas.
A number of factors favored Canadians’ interest in the U.S. housing market. Deeply-discounted asking prices, low competition for local investors and a strong Canadian dollar are just few of the factors that lured foreign investments to U.S. shores.
However, the situation is different today with properties receiving multiple bids. For instance, a CBC article reports that some properties have received between five and 10 bids, making it difficult for buyers hoping to score a new home with a low-ball offer.
According to the report, the recovery has been more noticeable in Arizona and Florida, which were hit badly during the housing bubble. Interestingly, these two states have active Canadian buyers.
In many Florida cities, prices have recovered significantly and it is no longer possible to buy premium properties at cheap rates, Wayne Levy, director of marketing for Florida Home Finders of Canada, told CBC.
"If you think you're going to find something on the water for $100,000 to $200,000, I've just saved you $500 in airfare," he said. "That just doesn't exist."
However, Levy says that the price increase has not put off a lot of Canadians from investing in the U.S. property market. He believes that the upswing have reassured buyers that the market is in recovery mode.
"I think a lot of people were waiting for good news before they were willing to pull the trigger," he said.
