Canadians Lured by Favorable Exchange Rate, Sun Goose Local Home Sales
A miserable winter, the soaring Canadian dollar and bargain prices are among the reasons snowbirds have embarked on a home-buying spree that has made the Coachella Valley one of the few places in Southern California where sales are rising.
The Canadian dollar is now worth about $1.05 to the U.S. dollar. The favorable currency exchange rate compares to eight years ago, when the Canadian dollar, known as the loonie, was worth about 62 cents compared to the U.S. dollar.
“I’ve got a lot of friends who are really interested in purchasing a home because our dollar is cookin’ right now,” said Liz Malinka, a Vancouver resident who bought a home in Palm Springs.
Malinka and her husband Frank, a financial planner, looked at almost 100 homes over two years. They decided on a mid-century modern home designed by well-known architect Jack Meiselman in the Racquet Club Estates area of Palm Springs.
“We had a clear vision of what we wanted and pretty much stuck with it,” said Liz Malinka, pointing to a pool deck with a view of the San Jacinto Mountains.
Real estate professionals say Canadian buyers are largely responsible for driving home sales up 7 percent in the first quarter while the rest of Southern California slumped.
David Tallman of the Windermere Real Estate office at The Springs Country Club in Rancho Mirage, said about 50 percent of homes at the private, member-owned country club are being purchased by Canadians this season.
“Historically we’ve sold about 25 percent of our houses to Canadians during a typical season,” Tallman said. “Their economy has continued to remain quite strong.”
A search by the Palm Springs Regional Association of Realtors staff showed 1,329 Canadian buyers and another 98 purchasers from other countries acquired homes or condos over the past year, based on a tally of those who registered international addresses. That figure could be higher because some foreign buyers may not have registered.
San Diego-based DataQuick Information Systems noted cash purchases accounted for 30.5 percent of home sales in Southern California last month, up from a 10-month average of 13.3 percent.
Absentee buyers – mostly of second-home purchasers and investors – bought 26percent of homes, DataQuick reported.
Rick Doyon and Shelley Anthony, a couple from Ottawa, took possession in February of a Plaza Villa condo in downtown Palm Springs. The loonie and “rock-bottom” prices were key factors driving the purchase of their second home.
But Doyon, a writer and retired founder of the marketing firm High Road Communications, said it had as much to do with wanting to be near friends they’ve made in the valley while visiting over the past four years.
“It was perfect timing for us,” Doyon said. “As writers, since we wrote our second screenplay here three year ago, Palm Springs is a great place to work.”
‘Wow’ prices
Rancho Mirage Realtors Claudine Messika and Alvin Fuchs with Keller Williams Realty say about 80 percent of clients were Canadians last year.
During the first quarter of this year, Messika and Fuchs said Canadians made up 60 percent of their client mix. Some – but not all – are buying.
“Some have made good deals and got some nice properties,” Fuchs said.
But others arrive convinced that foreclosures and other market issues have resulted in $400,000 homes going for $200,000 or less, he said.
Other factors such as WestJet’s relatively new direct flights to Canada have resulted in an uptick in house hunters, said Louise Hampton, a Realtor with Prudential California Realty in Palm Springs who has long worked with Canadian clients.
Many Canadians are paying cash. And unlike in the U.S., the housing market in most Canadian provinces has remained strong, enabling buyers to set up a line of credit against current real estate assets to finance property purchases in the valley.
That’s especially true in western Canada, where real estate values have soared in a region with an oil-based economy.
The Canadian Real Estate Association reported the average house price in February was $792,000 in Vancouver, $588,000 in British Columbia and $454,000 in Toronto.
“We come down here and go, ‘Wow,’” Malinka said of valley home prices.
More Canadians are also shopping for apartment buildings and other commercial real estate as well, said Richard Enright, with Rich Enright & Associates.
Wicked winter
Fuchs recently worked with a couple from Saskatchewan. At the time, the temperature difference between their Canadian province and the desert was 100 degrees, he said.
But it’s not just Canadians shopping for second homes and investment properties.
Tammy and Jim Franklin with Prudential California Realty in Palm Springs are working with Scott and Doree Wren of St. Louis to find a home in Indian Wells.
Scott Wren, an equity strategist for Wells Fargo, said an unusually tough Midwest winter was one of several factors that prompted the 50-year-old couple to move up their purchase plans.
“We’ve been on a (weather) roller coaster,” said Scott Wren, who after hunting for a house recently in sunny, 84-degree temperatures returned to a blustery St. Louis storm that dropped 6 inches of snow.
The Wrens are indeed hunting for bargains, but Scott Wren emphasized “we’re not trying to pick the bottom of the housing market.”
California, along with other “sun belt” states such as Arizona, Florida and Texas, accounted for 53 percent of all foreign purchases last year, the National Association of Realtors reported.
That’s one reason many local Realtors advertise north of the border.
By being members of Tarbell, Realtors “Canadian Team,” Ralph and Elynn Kennedy are featured in advertisements in all of the Northwest, including Alberta, British Columbia, and Saskatchewan, as well as Oregon and Washington.
“They’re definitely coming for the lifestyle,” Elynn Kennedy said of the Canadians’ interest in the Coachella Valley.
Written by MIKE PERRAULT The Desert Sun
