I have been noticing more and more Canadians starting to sell the homes they have purchased in Arizona in the past 5-7 years. Not only my own clients, but many others across Metro Phoenix. Let’s examine why this appears to be happening and whether this might be the right time to sell your home if you’re a Canadian.
In the past 3 years, the Canadian Dollar has fallen from a high of roughly $1.05US to a current low of $0.71US. That’s a 32% drop! In the same timeframe, home values have increase roughly 30-80% from their recessionary lows. While still a significant bargain due to how far values declined during the ‘great recession’ they are still considered by many to be a bargain when compared to other major US metropolitan markets.
So why are so many Canadians selling their homes now? Let’s take a look at a more specific example.
Let’s say you bought your home back when the Canadian dollar was strong in 2012 at par value and you paid cash (no mortgage). You are now thinking of selling and trying to figure out how much money you’ve made as your home has appreciate 50% from the time of your purchase. We will leave out closing and selling costs to keep the example simple.
Purchase Price in Jan 2012: US$100,000 (Cdn$100,000)
Sale Price in Jan 2016: US$150,000 (Cdn$211,267)
Average yearly home appreciation: 12.5%
Average yearly total appreciation including exchange conversion: 27.8%
Total Gain on investment in Cdn$ Terms: $111,267 or 111.3%
This example allows you to see how the tanking Canadian Dollar has made a great home investment in Metro Phoenix an absolutely incredible one. Some of my clients have done even better because their home values have gained significantly more than 50% in that timeframe.
If you are Canadian and thinking of selling your Arizona real estate, there are some other factors you will need to consider including IRS taxation issues (FIRPTA) along with disclosure requirements. Please feel free to contact us for a free market evaluation to determine what your home is worth and for assistance in planning your home sale in advance. Advanced planning could save you major headaches and money. We are well versed in Canadian home ownership and sale in Metro Phoenix having lived here for 20 years since moving from Toronto, Ontario. Our specialty is assisting Canadians buy & sell real estate in Metro Phoenix and we will guide you through and simply the entire process.
Still like the idea of keeping your home in our sunny and warm state but want to perhaps cash out some of the gain and profit from the Cdn$ decline? Then maybe refinancing your property is the right strategy to have the best of both worlds. Contact me to discuss your options. We’re here to hel