Why are Canadians Selling Arizona homes?
Canadians selling Arizona homes makes perfect sense. Our friends up North are taking advantage of rising Arizona home prices and their side bet on foreign exchange rates.
OK bear with me, this is where it gets geeky! The first chart shows how far the Canadian Dollar has dropped, look at the last three years alone! This decline makes it more expensive for Canadians to buy homes in the states but more profitable to sell homes.
The second chart shows the US Dollar going up over the past few years. This combination has created huge price increases for Canadians when taking into consideration the foreign exchange rate. As of this writing $1 US Dollar is worth $1.37 in Canadian Dollars.
The red line in the third chart below shows how prices look to sellers in Canada, this is after exchanged for Canadian Dollars. The recent sharp increase compared to the grey line, US Dollar, puts prices near 2006 levels based on the Canadian Dollar. That's an incredible $60 per square foot difference compared to US Currency!
Chart below from The Cromford Report
Above, the red line represents prices based on Canadian Dollars. Buying with Canadian Dollars is not a great deal but selling and exchanging into Canadian Dollars is a great deal. Buyers between 2009 and 2013 are up big as the rise in Arizona real estate combined with the drop in the Canadian Dollar has created a huge profit for Canadians.
Don't forget, Canadians sell in US Dollars and convert to Canadian Dollars at a very favorable exchange rate. So not only do they profit from rising home prices but they win big by trading in the foreign currency markets! Not a bad deal eh!?
No guarantees can be made about the future direction of foreign currencies or the Arizona housing market. However, it's safe to say that if Canadians were looking for a time to sell, now would be a great time!
Please share this with your Canadian friends that own Arizona real estate and have them contact me for a free price analysis of their home.
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