Economic tides roll in on U.S. sunbelt
The epic beach party might not be over yet, but the economic tides are starting to inch a little closer for aspiring Canadian snowbirds.
A pair of concurrent trends over the last year have chipped away at the historic buying power Canadians enjoyed in the American sunbelt since the financial crisis: a 10 per cent decline in the loonie coupled with a roughly 10 per cent rise in U.S. housing prices.
Each percentage point washes away a piece of the bargain.
There are still deals to be had, as sunbelt housing prices haven't fully recovered from the 2008 crash — but Canadians should be aware that they're entering a much more competitive market.
To illustrate that point, one longtime real-estate agent points at a Boca Raton highrise.
"If you ask me about that apartment (and say), 'I'd like a two-bedroom,' what you're asking for might be sold," says Sandy Yacker, motioning toward a random building as she drives up Florida's coastal highway.
"I'd have to show you another building. We don't have any inventory. The inventory was plentiful two years ago — now there might not be any in that building."
Yacker's seen a lot in her 74 years, nearly all of it spent in Florida and much of it spent working as a real-estate agent.
She remembers seeing the elegant clothes along Miami's South Beach, in a distant era when women wore gowns and men wore suits instead of today's dental-floss fashions along Ocean Drive. She believes that was Harry Truman's presidential motorcade she saw as a girl once, rolling by on Flagler Street.
But she's never seen anything like 2008.
In her own condo complex, one-bedroom villas that had gone for US$280,000 were suddenly being panic-sold at $110,000 by frail seniors who had to sell in a hurry, because they needed to move into specialized homes.
She says those units are now going for about $170,000, after a bounce last year. The latest trend might mean lesser deals for bargain-hunting foreigners, but what a relief for homeowners pounded by the crisis.
"It was a shock to your pocketbook," she says of 2008.
"It's no question.... It was disturbing if you were trying to sell if, God forbid, an emergency came up — if a person got sick and couldn't stay in their home," Yacker said.
"But it's started to rise in price."
Bob Slack, a retired school principal from Ontario who has a home near Lakeland, Fla., concurred with that assessment.
Slack bought a home in Florida 16 years ago and has witnessed economic shifts before. He said people might spend a little less on a house, a little less on meals in restaurants, and a little less time on the golf course.
But they'll mostly keep coming.
"There are many ways snowbirds cope with a fluctuating dollar," Slack said. "People just adapt."
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