Posted on: August 22, 2012
American real estate markets—especially Florida’s—are experiencing “fresh signs of improvement,” according to a recent CBC News article, “Canadian Buyers Face More Competition as U.S. Housing Recovers.”
Prices went up an average of 2.2% across the country in May 2012, marking the first consecutive months of cross-country gains since the housing-market collapse of 2007. The CBC indicates that “the worst” of 2007’s meltdown “may be over,” and goes on to observe that “home prices in many cities have begun to rebound, inventory has begun to drop, sales in many of the worst-hit areas are rising, and building permits have jumped as [. . .] builders respond to growing demand.”
The CBC report echoes last spring’s TIME Magazine story, “Housing Market Recovery Has Officially Begun,” which accurately predicted that the recovery would be “driven by rental demand.” Since the downturn of 2007, plummeting home prices, stingy banks, and rising rents have made renting an investment property in Florida “very profitable.”
The CBC and TIME Magazine’s accurate reporting underscores what we at MSR Americas—and our many savvy investors—have long known: that sustained price gains make the already attractive Florida market an even more enticing investment opportunity.
Investing in Florida has nearly become a Canadian pastime, after all. Canadians hold the number one position internationally for foreign investments in American real estate—23% in 2010, up from 7% in 2010, according to a 2011 report on Canadian buyers by the U.S. National Association of Realtors.
But these opportunities “could be closing for bargain-hunting Canadians eyeing potential investment or getaway properties,” says the CBC. However, while prices have steadily increased, the Florida market in particular remains a splendid investment opportunity. Indeed, CBC confirms that the “recent price gains don’t seem to have dampened the buying interest from Canadians, suggesting that the upturn may have actually reassured buyers that the market has indeed bottomed and is in recovery mode.”
The CBC correctly notes that nowhere in the U.S. has the “long-awaited recovery been more noticeable than in . . . Florida”—one of the hardest hit states. Even though prices have risen, Canadians who purchased in Florida “even a few months ago,” says the CBC, are “starting to see a return on the investment.”
What’s driving Canadian investment besides sunny beaches, blue skies, and attractive cultural amenities?
With the dollar nearly par with the American dollar, the advantage is clear: your money has never gone further.
Although the prices are climbing for Florida real estate, the current market’s prices remain well below the peak prices of 2005. You’re still getting a steal even if you’re just investing now. Low prices plus a strong Loonie combine for an exceptional value.
Low Interest Rates:
Interest rates remain historically low, and there is no indication that they’ll budge any time soon.
With prices climbing steadily, sensibly, your equity remains real, not inflated or artificial. We’re climbing out of the trough and heading to the peak once more. Using your investment property to rent to tourists or locals is an obviously lucrative opportunity that covers background expenses—and generates profit.
Put it all together and you have a stunning deal. It’s what we’ve always said here at MSR Americas, but it’s still nice to hear it validated by the big news outlets.
(Even if they are a little slow to report it).
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