Timing right for Canadian snowbirds to sell
MIAMI – Feb. 1, 2016 – More and more Canadians who purchased U.S. homes cheap when money exchange rates favored them are now selling to take advantage of rising U.S. house prices, a plunging loonie and strong U.S. dollar. For investors, it's the old standard: Buy low and sell high.
Even with added costs such as a possible capital gains tax, many Canadians still come out far ahead. The exchange rate with the loonie is currently hovering around 71 American cents – a reversal from six years ago, when the loonie was around par with a U.S. dollar and 2011 when it equaled $1.05.
At the same time the loonie was strong, housing prices in much of the United States took a dive, triggered by the 2008 subprime mortgage meltdown and an economic boom gone bust.
Canadians, from snowbirds to investors, eagerly swooped into hot spots such as Arizona and Florida to buy a piece of sunny real estate at a low-low price. Canadian sales more than doubled from March 2011 to 2012 – to an estimated $15.9 billion – according to a National Association of Realtors® survey.
Thanks to a strengthening economy, BMO economist Robert Kavcic calculates that U.S. housing prices in a number of markets have shot up between 30 percent and 50 percent.
In Florida, Realtor Brent Leathwood is among those agents seeing a surge of Canadians cashing out. When the loonie was stronger from 2009 to 2013, nearly all of his Canadian clients were buyers. Today, he says, almost 80 percent of them want to sell their residences.
Source: CBC News (Canada) (02/01/16) Harris, Sophia
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