The Canadian Press - ONLINE EDITION

In U.S. sunbelt, economic tides roll in on the real-estate deal of a lifetime

  • Print

BOCA RATON, Fla. - The epic beach party might not be over yet, but the economic tides are starting to inch a little closer for aspiring Canadian snowbirds.

A pair of concurrent trends over the last year have chipped away at the historic buying power Canadians enjoyed in the American sunbelt since the financial crisis: a 10 per cent decline in the loonie coupled with a roughly 10 per cent rise in U.S. housing prices.

Each percentage point washes away a piece of the bargain.

There are still deals to be had, as sunbelt housing prices haven't fully recovered from the 2008 crash — but Canadians should be aware that they're entering a much more competitive market.

To illustrate that point, one longtime real-estate agent points at a Boca Raton highrise.

"If you ask me about that apartment (and say), 'I'd like a two-bedroom,' what you're asking for might be sold," says Sandy Yacker, motioning toward a random building as she drives up Florida's coastal highway.

"I'd have to show you another building. We don't have any inventory. The inventory was plentiful two years ago — now there might not be any in that building."

Yacker's seen a lot in her 74 years, nearly all of it spent in Florida and much of it spent working as a real-estate agent.

She remembers seeing the elegant clothes along Miami's South Beach, in a distant era when women wore gowns and men wore suits instead of today's dental-floss fashions along Ocean Drive. She believes that was Harry Truman's presidential motorcade she saw as a girl once, rolling by on Flagler Street.

But she's never seen anything like 2008.

In her own condo complex, two-bedroom villas that had gone for US$280,000 were suddenly being panic-sold at $110,000 by frail seniors who had to sell in a hurry, because they needed to move into specialized homes.

She says those units are now going for about $170,000, after a bounce last year. The latest trend might mean lesser deals for bargain-hunting foreigners, but what a relief for homeowners pounded by the crisis.

"It was a shock to your pocketbook," she says of 2008.

"It's no question.... It was disturbing if you were trying to sell if, God forbid, an emergency came up — if a person got sick and couldn't stay in their home," Yacker said.

"But it's started to rise in price."

How's this for a telling stat: the number of Floridians taking the test to become real-estate agents nearly doubled last year, to 42,000, according to a report by the Tampa Bay Times.

The shift is confirmed in numbers from the U.S. National Association of Realtors for 2013. They say U.S. sales activity increased by 9.1 per cent, for their best year since 2006. The median home price shot up 11.5 per cent, the biggest increase since 2005.

Meanwhile, though, U.S. home purchases by foreigners edged backward in 2012-13.

International-purchase numbers for the last calendar year aren't out yet, but through March 2013 the total was $68.2 billion — still high, historically, but much lower than the $82.5 billion from 2011-12.

Canadians are the biggest international buyers of those U.S. homes, comprising one-quarter of foreign purchases. And Florida is their No. 1 choice — with 39 per cent of Canadian purchases occurring there. That's followed by 24 per cent in Arizona, and single digits in California, Hawaii, Texas and other states.

One economist predicted an impact from the currency fluctuation, albeit a limited one.

Statistics crunched by the TD Bank for The Canadian Press suggest a 10-cent decline in the loonie likely means 250,000 less visitors per year to Florida, and a decrease in spending of about 0.7 per cent of the state's GDP (or somewhere between $250 million and $400 million).

But there's a notable asterisk: Canadian visits to Florida have been growing so rapidly in recent years that even a dip would likely just mean that the growth continues, only slower.

This is after years in which Canadian visits to Florida increased 12 per cent in 2010, followed by 6 per cent, 6 per cent and 3 per cent in 2013. For this year, TD projects an increase in Canadian visits to the sunshine state of two per cent.

"I think the longer-term period of rapid growth — at least for the next few years — is probably behind us. I think we will see a pause in that trend," said Derek Burleton, the vice-president and deputy chief economist of the TD Bank Financial Group.

"I'd say growth (is) pausing, but I don't think we're going to see the level of Canadian spending and involvement in the real-estate market go back to where it was five or 10 years ago (before the crash)."

He said the currency fluctuation will be felt far more in the northern U.S., in areas that have come to benefit from Canadian cross-border shoppers.

As for the sunbelt, he said, the economics become a secondary factor.

People are drawn there for reasons other than cost-savings and, with baby boomers retiring, he predicted Canadians will keep visiting and snapping up property to be close to the beach and the sunshine.

Bob Slack, a retired school principal from Ontario who has a home near Lakeland, Fla., concurred with that assessment.

Slack bought a home in Florida 16 years ago and has witnessed economic shifts before. He said people might spend a little less on a house, a little less on meals in restaurants, and a little less time on the golf course.

But they'll mostly keep coming.

"There are many ways snowbirds cope with a fluctuating dollar," Slack said. "People just adapt."

Note to readers: This is a corrected story. An earlier version gave incorrect information about the number of bedrooms in villas that had once sold for US$280,000.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Spring fashion trends

View more like this

Photo Store Gallery

  • Winnipeg’s best friend the dragon fly takes a break at English Gardens in Assiniboine Park Wednesday- A dragon fly can eat  food equal to its own weight in 30 minutes-Standup photo- June 13, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • Geese fight as a male defends his nesting site at the duck pond at St Vital Park Thursday morning- See Bryksa’s Goose a Day Photo- Day 08- May 10, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

What are you most looking forward to this Easter weekend?

View Results

View Related Story

Ads by Google