Amy's Blog

Phoenix Housing Rises as Canada Buyers Seek Desert Discount

January 19th, 2012

Jan. 19 (Bloomberg) — Bob Major returned to Phoenix in October in search of more bargains like the four empty houses he bought in 2010 at rock-bottom prices. The retired builder from Vancouver instead found real estate about 20 percent higher and stiff competition.

“There’s been an extreme turn,” Major, 66, said in an interview at a Chandler, Arizona, pizzeria, sitting beside his wife, Wendy. “We put bids on 30 properties and only got two.”

The Phoenix housing market, down 55 percent from peak values with more than two-thirds of borrowers owing more than their properties are worth, is starting to recover as demand grows and inventory shrinks. Sales rose in November for the 12th straight month on a year-over-year basis, and distressed real estate accounted for the smallest share of purchases since 2008, according to research firm DataQuick.

“The laws of supply and demand are finally taking hold,” said Jim Belfiore, president of Belfiore Real Estate Consulting LLC in Phoenix. “We’ve cleaned house. This market is poised to make a significant jump.”

Values may increase 9 percent this year in Phoenix, known as the “Valley of the Sun” for its desert climate and triple- digit summer temperatures, as homes in or near foreclosure are bought up, according to Clear Capital Inc. Bank-owned property, which made up two-thirds of sales at the May 2009 market trough, now accounts for only one-third, said Alex Villacorta, director of research at the real estate data company in Truckee, California.

‘Pain Was Greater’

Pending foreclosures in Maricopa County, where Phoenix is located, tumbled by almost two-thirds in two years to 18,325 this month, according to Mike Orr, publisher of the Cromford Report, a local housing information service. In December, first- time foreclosure filings in Arizona fell 41 percent from the previous month to the lowest since 2007, data firm RealtyTrac Inc. said.

“The pain was greater here,” Orr said. “I think the reward for that is we’ll be out of the woods faster.”

Arizona’s bank-owned inventory has shrunk relative to other hard-hit housing states partly because courts don’t oversee property seizures, said Daren Blomquist, spokesman for Irvine, California-based RealtyTrac. It takes an average of 125 days to complete a bank-owned home sale in Arizona, compared with 217 days in Florida, a “judicial state” with a foreclosure glut, according to the company. The U.S. average is 193 days.

The winnowing has boosted the average Phoenix property sale to $85 a square foot in December, up 7.6 percent from the market bottom in August, according to Orr, who is also the real estate center director at Arizona State University’s W.P. Carey School of Business. Prices are still down from a peak of $190 a square foot in June 2006, he said.

Only Gainer

“I never would have believed what Phoenix has gone through, but the data speaks for itself,” said Karl Case, co- founder of an S&P/Case-Shiller home-price index that showed the metropolitan area as the only gainer among its 20 members in October. “When prices fall that much and interest rates are this low, it’s got to be the case that the markets begin to clear.”

The upturn follows more than five years of decline, the worst housing bust in a city where home construction for new Arizona residents has been the path to economic growth, Phoenix Mayor Greg Stanton said in a telephone interview. Falling U.S. prices and bloated consumer debt have arrested mobility, trapping owners who can’t sell their homes, according to Orr.

Jobs Lost

Arizona lost about 324,000 jobs in three years — about one-third in construction — before employment bottomed in September 2010, U.S. Bureau of Labor Statistics data show. The state added about 45,000 jobs last year. At that pace, it will take until 2015 to reach pre-bust levels, said Lee McPheters, director of Arizona State’s JPMorgan Chase Economic Outlook Center.

Even with fewer foreclosures and prices turning, Phoenix has the sixth-highest U.S. metropolitan rate of foreclosure filings per household, according to RealtyTrac. Phoenix led the 25 largest U.S. metropolitan areas with two-thirds of its mortgaged homes in negative equity at the end of the third quarter, Zillow Inc. said. Across the nation, 29 percent of all mortgaged homes were “underwater,” meaning the properties were worth less than their loan balances.

Buying Repossessed Homes

Steep discounts have lured investors such as American Residential Properties LLC, which used more than half of a $100 million fund to buy 800 Phoenix-area homes at an average price of $120,000, some down from as much as $400,000 five years ago, said Laurie Hawkes, president of the Phoenix-based company. It’s now teaming with New York-based Ranieri Partners LLC on a proposal to buy repossessions from government mortgage companies Fannie Mae and Freddie Mac and manage the properties as rentals.

“Phoenix appears to be leading the nation in terms of major metropolitan areas that are recovering,” Hawkes said. “It’s considerably faster than many people thought.”

Bargain-hunting also attracted flocks of Canadians taking advantage of a 28 percent currency gain versus the U.S. dollar since March 2009 — and winters with an average January high of 66 degrees Fahrenheit (19 degrees Celsius). Canadians edged out Californians last year as the largest group of outside buyers, with 4.2 percent of purchases, Orr said.

“My clients are here in full force,” said Diane Olson, a Phoenix real estate agent who works with Canadian investors and winter-home seekers. The transplant from Winnipeg, Manitoba, where the temperature was minus 8 degrees Fahrenheit yesterday, has brokered more than 500 deals since 2008 with Canadian “snowbirds,” she said.

Six Arizona Months

Major, the retired Vancouver homebuilder, spent $400,000 for four properties during his 2010 investment foray, including a three-bedroom foreclosure that he fixed up as his own winter residence. He plans to spend six months a year in Arizona.

“There were so many listings the first time, you could really take your pick,” Major said at the pizza restaurant, where teenagers in shorts ate ice cream outside. “Now you can’t bargain nearly as much. The whole attitude is different.”

A property similar to a house that Major bought for $85,000 in 2010 sold in October for about $102,000, he said.

Stanton, a Democratic former city councilman who was elected mayor in November, said Phoenix needs to move from a reliance on housing cycles toward more sustainable technology and health-care jobs. His idea for a health and science development, to be built on 600 acres (240 hectares) northeast of downtown, was announced in his Jan. 3 inauguration speech. It has the support of the Mayo Clinic and Arizona State University, which would be partners in the project, Stanton said.

Phoenix Hit Hard

“Being disproportionately dependent on single-family homes is the reason why this recession hit Phoenix so hard,” said Stanton, himself the owner of an underwater house in central Phoenix that he purchased in April 2007.

The hoped-for employment shift may already be under way. Intel Corp. broke ground last year on a $5 billion plant in Chandler, about 20 miles (32 kilometers) southeast of downtown Phoenix, that will require “thousands” of temporary construction and permanent jobs, said Laura Anderson, a spokeswoman for the world’s largest semiconductor maker. PayPal, an online payment service owned by EBay Inc., plans more hiring after adding 700 jobs in 2011, said Sara Gorman, a spokeswoman for the unit.

Phoenix had 30,000 of the state’s new positions in the 12 months through October, led by health care, transportation and warehousing jobs, McPheters said.

Health-Care Growth

The proposed campus is “very exciting” and would attract startup companies as well as international firms, said Wyatt Decker, chief executive officer of the Mayo Clinic’s Arizona branch in Phoenix, which employs 400 physicians and scientists and a total staff of 5,000. The state’s health-care sector has grown even during the real estate recession, he said.

“We’re all rowing in the same direction,” Decker said of policy makers such as Stanton and education and science executives.

Even homebuilding has revived. Single-family construction permits are expected to climb to 11,300 this year, up 66 percent from a 2010 low, according to the average estimate of 13 Phoenix market analysts surveyed by Arizona State University.

Meanwhile, investors like Major peck away at the real estate overhang. Time spent in his new $25,000 outdoor spa, the biggest cost of his foreclosure renovation, is a world away from frozen Canadian winters, he said.

“We like it at night before bed, when it’s warm and all the stars are out,” he said. “There’s an awful lot of rain and dullness in Vancouver from October to April. And it’s cold.”

–Editors: Daniel Taub, Christine Maurus

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U.S. Real Estate Market has more Canadians Heading South

November 18th, 2011

Devalued Property Luring Snowbirds

BY CLAIRE BROWNELL, THE WINDSOR STAR NOVEMBER 17, 2011

Contact Amy Koch for More Information on Arizona Real Estate Opportunities. 602.386.7343

The southern American sun and bargain basement housing prices are beckoning Ryan Deters’ father and many other Canadians, who are diving into cross-border real estate in record numbers.

“Someone who’s earned an average income over a long time and deserves a little bit of fun in their retirement can still afford something in a warm climate, like Arizona or Florida,” said Deters, an associate agent with Co-Operators Insurance in Windsor, who is helping his father look for a home in the U.S.

“There are a lot of properties down there that just kind of fit that bill.”

The collapse of the American real estate market over the last few years and the improved value of the Canadian dollar has resulted in a record number of Canadians snapping up severely devalued property south of the border.

Real estate in warmer climates is particularly popular among snowbirds looking for retirement homes, but others are buying for investment purposes, hoping to sell at a large profit as the market improves or to renovate and flip the home.

Darrin Lewis and his business partner Kim Spirou are taking advantage of the demand by opening the Sunshine Property Shop, a new Windsor consulting business that offers advice to would-be American property owners looking for the best deal. Lewis, who has worked with financial institutions on both sides of the border and says he’s very familiar with American real estate, said he started the business after being inundated with requests for advice from family and friends considering buying in the U.S.

Lewis’s business model is to offer advice on all aspects of the property purchase from start to finish, from finding a place to tax advice. He guarantees clients he’ll find savings that are equal or greater than his fees, which can run to about $2,500 for a client looking for a condominium, by negotiating with banks, real estate agents and other people involved in the process.

“There’s a need out there. People want to, but they’re scared or don’t know how to do it,” he said. “There’s just so much of the unknown. You don’t want something to come up that you’re not familiar with, you’re not aware of and you get taken advantage of.”

It’s clear from some of the properties on Lewis’s watch list that there are also huge bargains to be had.

Among those properties is a two bedroom, two bathroom townhouse in Fort Myers, Fla., that was last sold in 2006 for $195,000 and is now listed at $44,440. A 1,796 square foot house in Scottsdale, Ariz., with four bedrooms and two bathrooms was last sold in 2007 for $390,000 and is now listed at $200,000. A Stuart, Fla., beachfront condo with 1,108 square feet was last sold in 2005 for $485,000 and is now listed at $147,500.

However, it’s important not to let the dollar signs lighting up in your eyes blind you from seeing the potential pitfalls. Terry Ritchie, a cross-border financial adviser and author of The Canadian Snowbird in America, said anyone looking to make a quick buck flipping houses may be in for a shock.

“There may be those opportunities, but there may not be quite as many of those as we’d like to believe,” he said. “If you want to buy as an investor, then you’ve got to stay in for the long term.”

It’s still possible the American real estate market hasn’t hit bottom yet, currency fluctuations are hard to predict and it’s not easy to do a major renovation on a house in Phoenix from Windsor. Ritchie said the best strategy for buyers who aren’t planning on moving in right away is to buy and hold – for years – while renting the property out.

It’s also important to be mindful of tax consequences.

For example, some U.S. senators are proposing legislation that would allow Canadian snowbirds who own high-value property to stay for longer than six months. That may be appealing to seniors who want to extend their golf season, but it would mean filing a U.S. tax return and losing Canadian health care.

Lewis said there are other details people might not think to investigate, such as whether the condominium association they’re buying into is on the verge of bankruptcy or whether the home contains toxic Chinese drywall that needs to be removed at a prohibitive expense. In addition, Canadians buying property at foreclosure auctions may find they don’t get their bargain property after all if the original owner comes up with the money within six months.

Ritchie said Canadians who don’t know where to start should talk to people they know who have already taken the plunge. Research is very important, but try not to get overwhelmed or wait for the perfect time, he said.

“I can’t tell you if we’ve hit bottom and I can’t time the dollar. All I can tell you is there are lots of great opportunities to buy.”

© Copyright (c) The Windsor Star

Read more:http://www.windsorstar.com/business/real+estate+market+more+Canadians+heading+south/5726976/story.html#ixzz1e4RmBmIy

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Snowbirds flock to Scottsdale’s Sage

November 5th, 2011

Canal-front townhouses combine luxury living with an easy walk to Old Town Scottsdale. Canadian financing is available!

Contact Amy Koch to learn More about the Sage in Scottsdale.
Amy Koch
amy@amykoch.com
602.386.7343

BY DAWNA FREEMAN, EDMONTONJOURNAL.COM NOVEMBER 4, 2011 11:06 AM

SCOTTSDALE, ARIZ. – What snowbirds enjoy the most — apart from wearing shorts in January — is the alternative lifestyle experience a second home affords. If they have to drive to buy milk at home, they want to walk to nice restaurants down here. If they downsized to a condo in Canada, they want their Phoenix backyard to open onto a desert wash.

“They want a counter experience to life back home,” says Brendan Mann, principal of The Solvere Group, the brokerage firm handling the sales and marketing for a newly-completed boutique condominium and townhouse community in downtown Scottsdale.

“People are looking for a different experience here,” says Mann, a Vancouverite who moved to the U.S. in 2002. “If they live in the suburbs, they want the urban experience here.”

He says Sage offers second homebuyers the best of both worlds, combining the privacy of spacious single-family living with the luxury of a maintenance-free lifestyle in a quiet, tree-lined enclave steps away from world-class shopping, dining and entertainment.

The director of sales and marketing says Canadians prefer the lock-and-leave ownership. “They want owning to be easy; just show up, open a bottle of wine, watch the sunset from the patio, and walk along the canal to the Old Town.”

Located near the intersection of Camelback and N. Scottsdale roads, Sage is an eight-minute walk from historic downtown Scottsdale, six minutes away from the upscale Fashion Square Mall and a 20-minute drive from Sky Harbor International Airport. Three, three-storey buildings stretch along the Arizona Canal, offering residents views of Camelback Mountain at either sunset or sunrise across the canal’s waterfront.

The high-end complex features 32 condominiums, 16 two-level town houses and two penthouses. Homes start from the low $300s US and range in size from a 1,598 sq. ft. two-bedroom condo to a 2,155 sq. ft. townhouse with attached two-car garage to the larger 2,760 sq. ft. penthouse. Residents can choose from three condo layouts and four townhouse floor plans.

Mann says Sage offers the only brand-new town houses in downtown Scottsdale. The well-known Arizona city of 233,000 was named the fourth most desirable city in which to live by Businessweek.com in September.

Jeremy Ferdinands, who bought a two-bedroom plus den condo with a second-floor waterfront view in June, says Sage provided them the alternative lifestyle they wanted in a prime real estate location.

“We live in a very suburban neighbourhood in Surrey, B.C., and we wanted a totally opposite experience to Canada,” says Ferdinands, who’s been going to Arizona on business for the past 10 years. “Vancouver winters are dark and rainy and down there it’s warm and sunny.”

He said buying a turnkey home was important to him, as was living within walking distance of the nearby shops, restaurants, galleries and hiking trails, as well as vibrant Old Town Scottsdale. “We don’t even need a car. We can walk along the canal to have dinner in the Old Town every night.”

The housing market crash halted construction of the Sage project when it was near completion in May 2009, and the development was purchased by iStar Residential. Since sales reopened in February of this year, 25 of the 50 units have sold, four to Western Canadians. A two-bedroom condo, originally priced at $599,000 US, now sells for $299,000 US.

Compared to yesterday’s speculative real estate frenzy, Mann says the people who are buying today want to own the real estate and use the property. “They’re looking for a home that fulfils them now.” He says of the 25 homes sold at Sage, “there are no investors.”

Ferdinands says he’s still a few years away from retiring from the pharmaceutical business, but felt it would be hard to find this opportunity — a new property in a prime location for a reduced price — if they waited.

“Living in Vancouver, we’re really sensitive to how important location is,” he says. “We’ve seen how properties in desirable locations can quickly double and triple in price. Getting a good location here is going to be rare.”

After looking at eight or nine other developments, Ferdinands found the quality of the construction, appliances and finishings at the traditional-styled Sage “far and above what we saw elsewhere.”

Sage homes offer high-end cabinetry and finishes, including Dacor, Bosch, Grohe & Toto appliances and fixtures, granite and marble countertops, volcanic-stone gas fireplaces and hardwood floors. Sophisticated architectural detail and custom touches, such as solid cherrywood front doors with leaded glass accents, are standard throughout. Private oversized balconies and terraces overlook the mountain and water views.

The 3,400 sq. ft. clubhouse features an underground stone wine cellar with personal storage, a fitness area, a business and conference room and a canal-side social deck with lap pool, jetted hot spa and gas BBQ for outdoor entertaining.

Patricia Caffaro was down with her daughter in October to furnish the three-bedroom, 1,775, sq. ft., condo she purchased in June. She says the view of the canal off their second-storey balcony reminds her a bit of the long view she enjoys of the North Saskatchewan River from her condo in downtown Edmonton.

When she and her husband decided it was time to find a winter home, the retired couple rented a condo in North Vancouver where two of their four children live. But, she said, Vancouver’s weather and lofty real estate prices (“the HST on a $600,000 condo was $73,000”) led them to Phoenix.

“After looking at condos in Vancouver, Sage had a lot to recommend,” says Caffaro. “It’s a turnkey operation, nicely appointed, and move-in ready.”

She especially appreciates being able to walk to nearby amenities and services and stroll along the water canal because, as she confides with a smile, “when you get older, you want to keep moving.”

© Copyright (c) The Edmonton Journal

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Canadian Dollar Breezes Past Parity

October 29th, 2011

Canadian dollar breezes past parity on back of EU plan
TORONTO— The Canadian Press Published Thursday, Oct. 27, 2011 5:38AM EDT

The Canadian dollar CAD/USD-I surged well over a full U.S. cent to close above parity with the greenback Thursday after European leaders came up with a formula for dealing with the region’s crippling debt crisis.
The currency jumped 1.36 cents (U.S.) to $1.0088, its first close above parity since Sept. 20, as investors bought up riskier assets following the agreement. It had moved as high as $1.0109 during the session.

Since late September, the loonie had been caught up in intense market volatility as traders fled to the safe-haven status of the greenback on worries about a Greek default and the effect such a move would have on the financial system. It had tumbled as low as just above 95 cents. But markets SPX-I were relieved after European leaders came up with a three point plan to deal with the debt crisis, which has threatened the region’s banks and a fragile global economic recovery. These included a significant reduction in Greece’s debts and private creditors like banks will be asked to accept 50 per cent losses on the bonds they hold. The continent’s banks will be strengthened, partially so they could sustain deeper losses on Greek bonds.

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Canadians Find Refuge in Phoenix

October 29th, 2011

Canadians find refuge in Phoenix for themselves, their money

BY DAWNA FREEMAN, FOR POSTMEDIA NEWS OCTOBER 29, 2011

Canadians have been snapping up vacation and rental properties in Arizona, enjoying nearly two years in which the loonie was rising and house prices in the region were falling.

According to Tom Ruff, market researcher at The Information Market company, Canadians have surpassed the number of Californians buying property in Phoenix, with Albertans holding the most real estate.

Rattled investors and wary pre-retirees who watched some of their money disappear in the Great Recession or wilt away in low-interest savings accounts have been leveraging Arizona’s bottomed-out housing market and America’s weakened currency to park some savings, ride out the world financial storm and wait for housing prices and the U.S. dollar to go back up.

“There are incredible bargains here relative to other parts of the States,” says Mike Orr, a real estate analyst and founder of the weekly Cromford Report on the Greater Phoenix housing market, noting Phoenix homes are one-third the price of California homes.

He says Canadians who are betting on the future strength of the market “feel they will gain additional profit from the exchange rate when the currency returns back to historical norms. That’s the Canadian advantage.”

Phoenix housing market prices plummeted 55.8 per cent from June 2006 highs and are sitting at 2000 levels.

New listing prices appear to have bottomed out, remaining relatively flat for the past two years, while inventory continues to fall across Greater Phoenix due to fewer foreclosures, lack of new construction and homeowners sitting tight until prices begin to rise.

Orr’s Cromford Report showed 26,996 active listings as of Oct. 4, compared with 44,887 active listings one year earlier, a drop in supply from 6.7 to 3.5 months.

Under four months of inventory is regarded as a seller’s market, but as Orr explains, the Valley’s inventory is skewed by price range. This downturn reflects less than a month of inventory on property at the more active lower end.

David and Leanne Fullerton started thinking about buying a pre-retirement home in Phoenix last winter.

“We thought at the time we should get in while all conditions were favourable,” said David, 49. “It was a perfect storm to buy. Stocks were at a two-year high at the end of last year, the Canadian dollar was stronger than the U.S. and we received a 40 per cent discount on the 2006 housing price.”

Although it’ll be another decade before the couple spends more than shoulder seasons in Arizona, they wanted to buy a home they could enjoy now, rent to cover homeowner expenses, and hold for future returns.

© Copyright (c) The Regina Leader-Post

Read more:http://www.leaderpost.com/business/Canadians+find+refuge+Phoenix+themselves+their+money/5626406/story.html#ixzz1cD7nwRED

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Visa’s for Canadians!

October 21st, 2011

Great News for Canadians! – Keats Connelly
http://www.keatsconnelly.com/

Finally, great news, the latest version of the Retirement Visa for Canadians we have been lobbying for since the fourth edition of The Border Guide in the mid-1990s, has returned. Over 15 years, Bob Keats personally had countless meetings with US Senators and other political figures, immigration attorneys and Chambers of Commerce. Many readers of The Border Guide have written letters to their local politicians and Chambers of Commerce to try to get this Visa. The Retirement Visa will allow Canadians age 50+ to spend as much as 240 days annually in the US Sunbelt without worrying about immigration issues, plus they will be able to save a great deal of income tax to boot. Incredibly, we are getting some action in the US Congress and we believe since it is bipartisan, being pushed by some senior Senators, and with our having a Republican House, it has a very good chance of passing this time around.

The bill, S. 1746, also proposes a homeownership visa that would allow Canadians of any age to live in the US year-round and save a bundle in income taxes too. To qualify, a Canadian would need to spend at least $500,000 in acquiring a US home and other US residential property.

Bob Keats believes this will be a superior job creating bill than the current Jobs Bill being pushed by President Obama, at a cost to the American taxpayers of over $500 billion. This visa bill will cost virtually nothing, yet it will be an incredible jobs creator while simultaneously helping Canadians reduce their taxes and enjoy a lower cost-of-living lifestyle in a warm climate, without snow! Although Canadians will not be able to work on the retirement or homeownership visas, these visas provide a bridge to a work visa with proper immigration planning.

We are very optimistic and excited about the Retirement Visa as it has been such a long time coming. We will keep you informed as the bill works its way through the US political process to become law. We do expect it to become law within the first quarter of 2012, unless a major obstacle is thrown at it and it is delayed until after the 2012 US elections in November.

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Canadians Warm to Phoenix

October 8th, 2011

Canadians Warm to Phoenix
House Bargains, Greenback’s Woes Draw Northern Buyers Into Sun Belt Markets
By CHANA R. SCHOENBERGER

Canadians are on a Sun Belt shopping spree.

Phoenix and other warm-weather cities that have seen real-estate prices crater are newly popular among Canadians looking for second homes or investment properties, brokers and buyers say.

They are lured by the weak U.S. dollar, historically low interest rates and rock-bottom property prices, dragged down by high unemployment and a wave of foreclosures. For the two years that ended in March, Canadians made up the largest percentage of foreigners buying homes in the U.S.—23%—up from 11% in 2007, according to the National Association of Realtors. Arizona and Florida are the focus of their interest, according to the Realtors’ group.

Germain Villeneuve has $50 million to spend on Phoenix real estate, all from Canadian investors like himself. The former real-estate broker, 50 years old, moved to Phoenix from Montreal in January to oversee acquisitions for the Living Well Homes investment fund. Since October, he has bought 110 houses and two apartment buildings in the Phoenix area.

Living Well plans to fix up the properties and rent them to locals who have lost their homes to foreclosures and short sales—transactions in which the property sells for less than the mortgage. Then, five to seven years from now, the fund hopes to sell the homes for a profit.

Phoenix is newly popular among Canadians looking for second homes. Chana Schoenberg discusses with Simon Constable and Wendy Bounds on The News Hub.

“We know that when [the economy] recovers, the homes will appreciate in value, and the U.S. dollar will get stronger, so when it comes time to move our money back into Canadian dollars we’ll make more money,” said Mr. Villeneuve, calling from a three-bedroom, two-bath house he hoped to snap up at auction for $113,000—less than half its last sale price. It ended up going to another buyer for $120,100.

Such investments aren’t without risks. Continued economic weakness and high unemployment could keep battered housing prices from improving for an extended period. And the strong Canadian dollar, which has bolstered Canadians’ buying power in the U.S., could come back to haunt them.

The Canadian dollar began flirting with parity against the U.S. dollar—meaning one loonie could be exchanged for one greenback—in 2007. It dropped as low as 94 Canadian cents for each U.S. dollar, for the first time in three decades. The U.S. dollar gained strength during the 2008 financial crisis, then lost steam again. In the past few weeks, a burst of fear that the world economy is on the brink of another recession has led the greenback slightly upward, with one U.S. dollar now buying 1.03 Canadian dollars.

“Over the medium to long term, we continue to believe that the U.S. dollar will weaken materially from current levels, leaving Canadians who invest in U.S. real estate exposed to potential foreign-exchange losses,” said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.

Despite such risks, maple-leaf flags are popping up around Phoenix. At the Ice House Tavern, a sports bar, Molson Canadian is now the No. 2-selling beer on tap, after Miller Lite. The bar’s third annual Canada Day celebration July 1 attracted 70 people, after beginning in 2009 as a potluck for 15. “It kind of started as a joke and now it’s gotten pretty serious,” said owner Daryl Chester.

Wayne McIntosh, who owns the Half Moon Drive-In diner just north of Winnipeg, Manitoba, closed in June on a $260,000 vacation condo in Desert Ridge, in a new gated development that will be ready in February. He plans to take his wife and two children there at least five weeks a year.

“It’s purchasing power, plain and simple,” said Mr. McIntosh, 48, of the strong Canadian dollar. “In the days when our dollar was 60 or 65 cents, I wouldn’t even be talking to you. The strong Canadian dollar has created a lot of opportunities for Canadians.”

Buyers are paying cash or taking out mortgages with U.S. banks, said broker Michael Milic of Colliers International in Scottsdale, a Canadian with 15 years’ residency in the area. “They don’t mind lending to foreigners, I don’t think,” he said.

At Phoenix-Mesa Gateway Airport, flights from Bellingham, Wash., and Grand Forks, N.D., bring in Canadians who drive over the border for cheaper tickets, as low as about $250 round trip. Real-estate companies have discussed buying ads in the terminal targeting Canadians who want to buy property, said airport spokesman Brian Sexton.

Mr. Sexton represents the other side of the Phoenix real-estate trade. He bought his two-bedroom condo in 2007 for $180,000. With a growing family, including a new baby, he would like to move into a bigger place. But selling his condo is a challenge, even with similar units selling for $60,000, he said.

Mr. Sexton said his condo complex is rife with rumors a Canadian investor recently bought up a handful of units from short-sellers, with plans to rent them out. He is considering chasing down the buyer to see if there is any interest in his own unit.

“Americans always seemed to have more money than Canadians,” he said. “What happened?”

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Why Snowbirds Flock to Valley of the Sun

October 6th, 2011

Phoenix area lures Canadians longing for mid-winter warmth
BY DAWNA FREEMAN, FOR POSTMEDIA NEWSOCTOBER 1, 2011

Going south for the winter is like slipping through a tear in the fabric of the seasons. One minute you’re trudging through snow and slush on a dreary grey day, the next you’re enjoying brilliant sunshine and winter warmth.

It’s no wonder Canadians flock to Phoenix, a city that enjoys 320 days of sunshine annually and where, even between December and February, temperatures can reach 18 C to 21 C.

Hibernating through brutal summers, this metropolis of 4.5 million stretches to life in late fall as seasonal residents make their annual pilgrimage down from northern states and provinces to unlock their condos, gated community houses and mobile homes.

And when the retired and semi-retired return each year to the Valley of the Sun’s 18 cities and towns, they’re not just trading parkas for sweaters, or boots for sandals, they’re exchanging lifestyles.

“It’s like you live half your year in another life,” says Joyce Stewart, 66. After running a busy bed and breakfast in Vernon, B.C., between April and November, she and her husband Doug, 65, drive to Apache Junction, east of downtown Phoenix, to relax at their mobile home park for four months.

“Going down there is like going home,” she says, referring to the friendships and activities that resume within the community each winter. “We live a slower, more casual life here,” she adds, pinpointing the reason Canadians pay homage to this popular sun belt destination: “Even the days we don’t do anything in particular, we’re outside where it’s warm.”

Canadians who sojourn in the south each winter can’t help being more active, often combining back-home interests with the desert’s outdoor lifestyle. Joyce belongs to the local library and recently signed up for courses on desert zeroscaping and water management. Doug plays a little golf, hikes the nearby mountains and continues to sail during the winter at nearby Lake Pleasant.

Although with more than 200 courses, golf reigns in the Phoenix Valley, the mania never caught this pair of snowbirds, who find plenty else to do when not entertaining guests or getting together with other Canadians who winter there.

Living next to the state capital means a choice of big-ticket events from four professional sports teams and NASCAR racing to the visual and performing arts, plus world-class shopping and dining in trendy Scottsdale.

Ron Eggen, 67, owned a condo in Scottsdale for 15 years before moving to a gated adult community in Chandler. He says people shouldn’t think because they’ve vacationed several times in Phoenix they would be bored living there. “You’re not going down as a tourist, you’re going as a resident. You live like you would at home, only in a warmer climate.”

Second-home owners want that connection with their community, and Michael Colby, 66, says buying a home in an adult gated community is one of the best ways to meet people. He and his wife Eleanor, 67, from Kelowna, B.C., spend five-and-a-half months in a gated community in Mesa.

“Buying into a retirement community or a 55+ active community gives you a variety of activities and social opportunities,” Colby says. “Everyone comes from somewhere else, but they share a common purpose when they live in a retirement community. We’ve always found people very friendly.”

Diana Costain, a Vancouver real estate investor and businesswoman who bought a house near Scottsdale last year, goes down for three months at a time. She joined the Y and a hiking club to meet people. “You get a whole second group of friends, but the same types of friends you had back home,” says the 55-year-old, who counts Squamish, B.C., and Camelback Mountain in Scottsdale among her favourite places to hike.

The touristy trips – Grand Canyon, Tucson and Sedona, and old western towns like Tombstone and Prescott – are saved for guests. But when the forecast calls for damp weather, seasoned snowbirds never lack for things to do.

“On wetter or cooler days, we might head to Scottsdale for some shopping or catch a movie at the IPIC luxury theatre, where we’re served wine and food in reclining chairs,” says Marion Eccles, 52, who owns a home in the gated community of Corta Bella in Sun City West.

If warm weather and friendly neighbours aren’t reasons enough to embrace the southwestern life, consider the other benefits of stitching two shoulder seasons together.

“Being more active outside over the winter months does work the body more,” says Colby, “so I do feel better. And my joints and fingers aren’t as stiff.”

keeping busy in phoenix

Wondering how you’ll spend winters in Phoenix? There’s plenty to do.

Major sporting events Late February through March

· 2012: MLB Cactus League Spring Training, 15 teams at various ball parks in the Valley

· Nov. 2011 and Feb. 2012: NASCAR series, Phoenix International Raceway, Avondale

· Jan. 30 – Feb. 5, 2012: PGA Waste Management Phoenix Open, TPC Scottsdale

· March, 2012: LPGA RR Donnelley Founders Cup, JW Marriott Wildfire Golf Club, Phoenix

Other major winter events in Greater Phoenix November, December, select dates: Arizona Antique Market, Arizona State Fairgrounds, Greater Phoenix

· Jan. 16 – 22, 2012: Barrett-Jackson Collectors Car Auction, Scottsdale

· Jan 14 – March 25: Celebration of Fine Art, Scottsdale

· Jan 19 – April 1: Arizona Fine Art Expo, Phoenix

· February: Scottsdale Arabian Horse Show

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The Phoenix Housing ‘End Game’

September 27th, 2011

By Michael James McDonald, a stock market forecaster, real estate consultant and author.

Three months ago I wrote Signs of a Phoenix Housing Recovery Good for Homebuilders, which presented evidence that a Phoenix, Aris., housing recovery would start next year. Data flow over the last three months continues to confirm this forecast. This has made us look more closely at a possible Phoenix “end game.” The “end game” is the specific sequence of events that should occur as the Phoenix market transitions from distress into recovery. The transition should not be a gradual change but events should occur very rapidly and in a particular sequence. We think this is important for investors to know.

Why Phoenix was Chosen
Phoenix was chosen for this study for two reasons:

We believe Phoenix is a proxy for many distressed markets throughout the country and so what’s happening in Phoenix is probably a good indicator for other regions.
The depth of data needed to completely analyze and wrap one’s mind around the problem is available. In this I have to thank Cromford Associates LLC, licensed by ARMLS to provide subscribers and all 30,000 agents with detailed resale and foreclosure data, the “Information Market”, which counts and categorizes on a daily basis the status of every piece of distressed property in Maricopa County, and Corelogic, which also provided vital distressed market data.

The Probable Sequence of Events of the Phoenix “End Game”
Using this data we think the following forecast and “end game” is highly probable for Phoenix:

  • The inventory of distressed homes in Phoenix should deplete to normal levels by sometime next year – probably by mid-summer.
  • At that time sales of distressed homes should fall off rapidly leading to an almost immediate 20% rise in the median home price.
  • This sudden price “pop” should not happen everywhere or at the same time. It should occur intermittently, region by region, throughout Maricopa County as distressed inventory is depleted at different times for each region. This price “pop” should begin first with less expensive homes and then move upward.
  • This price rise should drop the number of homes with negative equity, further slowing strategic defaults and unfreezing thousands of marginal equity homeowners. This process – price rise and unfreezing – should become “self-sustaining” and help fuel the recovery and broaden the market.

It all starts with distressed inventory depletion. Read the Entire Article

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One in Five Canadians Eyeing U.S. Housing Market

September 27th, 2011

William Hanley, Financial Post · Mar. 31, 2011 | Last Updated: Apr. 1, 2011 12:16 PM ET

The U.S. housing market continues along its dismal trajectory, with overall prices dropping slightly again in February from the previous month. The median existing house price is now $156,100, which is more than 30% below the peak four years ago. Meantime, there is now 8.6 months supply and not one economist on a housing panel sees the possibility that prices will recover in five years to pre-bubble levels.

So what is the reaction of many Canadians to their American neighbours’ misfortune?

Yippee, say some Canadians who have been watching the U.S. housing collapse and rubbing their hands in anticipation of scooping up bargains. A recent survey for BMO Bank of Montreal by Leger Marketing shows that an astonishing one in five Canadians would consider buying a U.S. property.

Canadians are, not astonishingly, interested in the very areas where the U.S. housing depression has hit the hardest. Among the cities in the sunbelt, prices in Tampa have dropped 44%, Phoenix 54%, Las Vegas 67% and Miami 49%.

There’s no doubt the low, low prices and a Canadian dollar above parity are making buying a U.S. property very tempting. The favourable conditions may be a once-in-a-lifetime buying opportunity. And many Canadians have already seized the chance.

However, purchasing a chunk of heaven comes with many ifs, ands and buts. And no one I’ve seen clearly spells out the possible pitfalls and dangers better than Pat McKeough of The Successful Investor, who has a long track record of dispensing sound advice to his clients.

First, from a pure investing standpoint, McKeough reckons that a primary residence is enough exposure to real estate. So he is more skeptical than most. But for many people, buying that piece of paradise is a long-term dream and not just an investment. For those folks, McKeough outlines risk factors to consider that might snap them out of their dreams:

*Watch out for unexpected costs. Some states, such as Florida, can charge out-of-state homeowners higher property taxes than state residents. As well, homeowners in coastal states that face frequent hurricanes and floods (including California and Florida) often face high insurance costs

*Take a skeptical view of bargains in U.S. real estate investments. House prices in some U.S. markets have risen against the national trend. In Los Angeles, for example, home prices have gained more than 20% in 2010. That may indicate that these markets are moving back to more normal levels in the wake of the sub-prime mortgage meltdown and subsequent recession. But McKeough says they still face significant challenges, such as high unemployment and weak consumer confidence. So bargains may not be as appealing as they seem.

*How long do you plan to spend at your vacation property? You’ll have to budget for your home’s care while you’re not there because vacant homes invite burglars and vandals. If you plan to spend shorter periods of time at your vacation residence (less than six months, say), and you’re not concerned about making a return on the sale of the property, you may consider renting, instead. This will help you decide whether you want to commit permanently to a community before you buy.

*Remember that you’re buying a neighbourhood, not just a house. Owning real estate, especially vacation property, McKeough says, is much different than holding investments like stocks and mutual funds. It can involve unique risks, such as rising crime, unpleasant neighbours and other changes in the neighbourhood of your property. These risks can make it hard to find buyers when you are ready to sell. Before you buy, take a walk through the neighbourhood and take a skeptical look at the people you see.

And then there is the whole question of financing. BMO, not surprisingly, says snowbird buyers could finance with a line of credit arranged by BMO or one of its U.S. subsidiaries on their primary residences.

Though the survey says one in five Canadians would consider making a sunbelt property purchase, many of them might not wish to consider putting up their homes as collateral.

Buying a U.S. property is a big, big step, fraught with risks. Consider that between 1996 and 2006, six million Britons bought homes in Spain, which has now been gripped by a real estate depression. So, most of those Britons have learned a nasty lesson in the harshest of ways.

That doesn’t mean that buying a bargain home in Florida or Arizona won’t work out. But, first, a big gut check is in order. And then another. And another.

Financial Post

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