How likely are you to buy a property in the States? In Tucson, Arizona, Canadians are very likely to buy properties, if only for investment purposes. It’s this area that has recently seen many Canadian buyers swooping up what’s on the market, and in an area that’s seeing a lot of foreclosures and other downturns, it’s making it more difficult for those who actually live in Tucson.
It was the Tucson Citizen that pointed out that Canadian investors are taking all the properties in the Tucson market. It’s not hard to see why anyone would be interested in this area – it’s one that’s saturated with foreclosures. This is good news for anyone looking to buy a home, but especially for investors who can pay a very affordable mortgage on the property, and then charge high rents. The Citizen doesn’t say just how many Canadian investors are now flooding this U.S. market, but it does point to the fact that it’s a lot, and that it’s making it more difficult for buyers who now find themselves in bidding wars they just can’t compete in.
Andy Risdam, a buyer in the Tucson market, didn’t point to Canadians specifically, but did point towards investors when speaking about a home he was currently trying to purchase – a home that already had seven offers on it. “It’s the investors,” he said. “They have the cash.” But, the U.S. might want to hold up before it starts pointing its finger north of the border.
The Citizen also pointed out that Arizona, as a whole, has seen a major dip in housing; not surprisingly, seeing as how they’re just now starting to hope for a recovery from the recession, one in which their housing market took one of the hardest hits. The paper also reported that Phoenix, only two hours away from Tucson, had only 23,000 homes on the market. That’s only one-third of what it was three years ago in 2009, and it’s the lowest number Arizona has seen in over ten years. Surely we in Canada can’t be blamed for that. And, BMO Capital Markets says we might not be solely to blame for the huge number of investors taking many of the properties either.
BMO says that interest in American homes and vacation homes is waning, and that Canadians are instead becoming more interested in domestic properties and are therefore, taking out more Toronto and Ottawa mortgages than they are Arizona mortgages. BMO, who has branches in both Canada and the United States, found from a survey done this year that 16% of Canadians would consider buying a property in the States; and that 23% of foreign buyers in the United States is made up of Canadians. And even though that’s the largest group of foreign buyers in the States, we still can’t be blamed for their slow housing starts and lack of properties on the market.
Hopefully Arizona’s market will pick up and there will be plenty of properties to go around. In the meantime, all’s fair in buyers and bidding wars.
