G.M. Filisko is a Chicago area freelance and former editor for REALTOR® Magazine.
Oh, Thank You Very Much, Canada
Canadian buyers are bolstering business for real estate practitioners throughout the United States. Here's how you can target buyers to the north.
August 1, 2008
“If it wasn’t for bad luck, I wouldn’t have no luck at all” goes the old blues standard. Change a few words, and you’d be singing the tune of a good many real estate salespeople today.
Not so for real estate pros in resort areas and along the northern United States border, where Canadian buyers are generating significant business today.
“Since the beginning of 2007, all of my buyers have been Canadian,” says Jacques Drouin, a native of Quebec who’s now a sales associate at Realty Executives of the Palm Beaches in Lake Worth, Fla.
Mike Kent, a sales associate at Windermere Real Estate in the resort area of Birch Bay, Wash., also has been buoyed by neighbors from the north. He says 80 percent of his buyer pool is Canadian. ‘The greatest phenomenon is three to four miles from the border,” he says. But it’s not limited to that geography. Kent also represents a large condo project in Bellingham, Wash., about 20 miles south of the Canadian border, where about 40 percent of his sales in late 2007 also were to Canadians.
The weak U.S. dollar means that the Canadian dollar, nicknamed the “loonie,” buys more in the United States. That, coupled with softening real estate prices, makes the U.S. market a bargain for Canadians. The loonie has risen roughly 60 percent against the U.S. dollar from its 2002 low. As of early June, 97 Canadian cents bought one U.S. dollar.
Snowbirds in the Sunbelt
Although interest has picked up in the current market, Canadians have long been investors in U.S. real estate, making up 11 percent of international buyers; that ranks them third behind buyers from Mexico (13 percent) and the United Kingdom (12 percent), according to the 2007 NAR Profile of International Home Buying Activity, the most recent study tracking international buyers.
Where are Canadians buying? In addition to near the Canadian border, “primarily the Sunbelt states,” says Keats. “Arizona is really high, Florida is really high, and California and Texas are, to a lesser extent.”
What are they buying? Diane Byrne, vice president of marketing at Cachet Homes in Scottsdale, Ariz., says most of the homes she’s sold to Canadians have been “lock and leave” lifestyle condos or townhomes in gated communities with such amenities as clubhouses and heated pools.
Kent is selling both single-family homes in a resort community and high-rise condo units.
Calling all Canadians
To target Canadian buyers, “you have to show you have knowledge of the Canadian market in terms of where Canadians are going to live and what their needs are with respect to immigration, taxes, and titling,” Keats says.
Also, be able to send them to attorneys who can explain and guide them through the U.S. property title process, which is different from what they’re accustomed to in Canada.
In addition, Keats recommends joining clubs catering to Canadians. “There are Canadian clubs in just about every state; you can get a list from the Canadian consulate,” he says. “Joining them helps in terms of advertising and doing workshops.”