When we think of Canadians buying U.S. real estate, we think of timeshares by the beach in Florida, or condos by a golf course in Arizona. And if we look into a recent study conducted by the National Association of REALTORS® (NAR), there is some truth behind those stereotypes.
But, if we delve a little deeper into the study, there are many interesting trends relating to U.S. real estate purchases by Canadians that REALTORS® on this side of the border should be aware of. For example:
- Between March 2013-2014, Canadians purchased U.S. properties estimated at $13.8 billion in value, which is approximately 15 per cent of total international sales. Canada remains the top source of international clients in terms of transactions volume (19% of all transactions into the U.S.), but China accounted for the largest sales dollar volume because of the higher average price of properties purchased by Chinese buyers.
- 73% of purchases by Canadian buyers were for properties in Florida, Arizona, and California.
- The median price of the reported properties was $212,500 and the average price was $314,718.
- 86% of Canadian buyers purchased on an all-cash basis, while only 18% used mortgage financing. According to the NAR, “purchasing a U.S. property remains affordable with prices still below the peak level attained prior to the Great Recession (December 2007—June 2009). Tight credit standards in the U.S. have also favoured buyers paying with cash or making high down payments when presenting a contract for sale.”
- The intended use of the property was most likely to be for vacation/residential rental in a suburban or resort area with an intended length of stay of less than six months.
- About half (53%) of Canadians bought single-family type houses and 31% purchased a condominium/apartment type house.
- According to information from REALTOR.com, the five urban markets of greatest interest to Canadians searching for a home were Las Vegas, Detroit, Los Angeles, Fort Lauderdale, and Miami.
So, are you getting your share of these transnational sales?
CREA’s most recent international study demonstrated a high-level of buying activity into Canada, with 31% of members having worked with at least one international buyer during the past 12 months. But on the flip side, the large number of Canadians buying U.S. real estate also creates an abundance of referral opportunities for REALTORS® in Canada.
Certification programs exist that teach real estate professionals how to integrate international referrals into their business activities, as well as providing access to a network of other agents looking to share commissions on referrals. The Transnational Referral Certification course (TRC), provided by the International Consortium of Real Estate Associations and the NAR’s Certified International Property Specialist (CIPS) Designation are both great options and available online.
There are significant opportunities for REALTORS® to enhance and diversify their income through international real estate sales – it might take a little work, but they are there for the taking.
