Increasing business ties with U.S. state…Residential property in Arizona continues to be a hot commodity for Canadians.

According to the Canada Arizona Business Council, there has been a $1-million luxury home sold to a Canadian buyer every week in Arizona for nearly two years.

And the statistics do not reflect the total residential and commercial real estate categories where Canadians have been some of the most dominant investors and/or buyers, says the council.

Diane Olson, a realtor in the Phoenix area who specializes in finding homes for Canadian clients, said “buyers are still coming in seeing the great values.”

“Some phenomenal deals are in the higher amount. Our phones have been going non-stop all through spring. I expect it to be very busy this summer.”

The lure for Canadians — particularly Calgarians and Albertans — is the value of properties in Arizona is far less than for comparable properties in their local markets.

“People now are starting to look at a lot of different angles and realize how great it is here for cost, for having rentals, for return on their investment, for easy access. All of those things,” said Olson.

Glenn Williamson, founder and chief executive of the council, said about 60 per cent of those luxury homes have been purchased by Albertans.

“Not only are the Canadians buying luxury residential real estate in Arizona, the majority are cash buyers and the trend is increasing in all industry segments due directly to the 84 non-stop flights a week in season,” said Williamson. “There are over 600,000 Canadians coming to Arizona and this increased connectivity is having a direct impact on Arizona’s economic development, which now includes Canada as a major bi-lateral trade partner on the state and municipality levels.”

In the last decade or so, more and more Canadians have made Arizona a destination for their holidays and that has resulted in many purchasing residential property, he said.

“You’re seeing an enormous amount of accretive wealth happening to a middle class in Alberta in the last seven or 10 years and one of the boxes you would tick off is ‘let’s buy a house somewhere in the sun’,” said Williamson.

“And I think Arizona’s complete and absolute failure in the housing market has (created) opportunistic bottom-feeding. It is the worst housing market in the U.S. if you’re on the selling side. If you’re on the buying side, it’s just stellar. You can’t beat it. You’re getting houses for 60 and 70 per cent off. And they’re relatively all new houses.”

Douglas Fulton, chief executive of Fulton Homes in Arizona, said there has been a significant amount of Canadians purchasing homes in the past 12 months which has shored up the local housing market in Arizona.

Report by Mario Toneguzzi – Calgary Herald

Homes near Canadian border avoid much of damage.

While homeowners might be sleepless in Seattle over their plummeting house prices, Americans who live closer to the Canadian border appear to be avoiding the worst of the real estate meltdown.

Median house prices in Bellingham have declined only 10 per cent from the July 2007 peak, compared to 26 per cent in Seattle, according to Zillow.com, an online real estate database and marketplace.

The median Bellingham home price hit $287,000 in July 2007 and was $258,000 at the end of 2010. In Seattle, the median price peaked at $465,000 in July 2007 and had dropped to $344,000 as of Jan. 1. The median is the price at which half of houses cost more and half cost less. All figures are in U.S. dollars.

It took longer than it did in other large American cities, but many Seattle residents are also now stuck with mortgages worth more than their houses.

According to Zillow.com, 34.3 per cent of all single-family homeowners with mortgages in King, Snohomish and Pierce counties were “underwater” on their homes. That was higher than the national figure with “negative equity,” 27 per cent.

A year ago, less than 23 per cent of Seattle-area houses had negative equity. Data was not available for Whatcom and Skagit counties, the two counties closest to Canada.

Negative equity is rising faster now in the Seattle area largely “because of where we are in the housing cycle,” said Stan Humphries, Zillow’s chief economist.

Home values in the Seattle area kept rising for a year after values began falling in most of the rest of the country, Humphries said. Now Seattle is seeing steeper drops — leaving more homeowners upside down — as price declines in many other metropolitan areas are moderating.

“We’re kind of where L.A. was in early 2009,” Humphries said.

Negative equity can have a significant impact on both the housing market and the broader economy, especially if the gap between the home’s value and the loan balance is large, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.

It increases the likelihood that owners will default — even if they still can manage the payments, he said.

After that, they probably wouldn’t be able to buy another house anytime soon, he added, “and that would hold the housing market back.”

While the percentage of houses with negative equity in the Seattle area is climbing, it still doesn’t compare with Sun Belt markets that have become poster children for the housing bust. Eighty-two per cent of all houses in Las Vegas have negative equity, as well as 70 per cent in Phoenix and 62 per cent in Orlando, Fla., Zillow estimates.

Zillow determines whether a house is underwater by comparing publicly available loan information with the company’s proprietary estimate of the home’s value. Those estimates, too, are extrapolated from public records.

Underwater homeowners who don’t default also may behave in ways that harm the economy, some researchers suggest. They may be less likely to move — even for a better job — and less inclined to spend money on home improvements.

Foreclosure re-sales as a percentage of all house sales are also slightly lower in Bellingham: five per cent, compared to eight per cent in Seattle. State-wide, 18 per cent of all sales were foreclosure re-sales.

Report by Jame Kwantes and Eric Pryne, Vancouver Sun; Seattle Times.

Vancouver is a coastal city situated in British Columbia, Canada. The city has a high population density relative to other North American cities. Vancouver is characterized by high rise residential and commercial buildings. In Mercer Consultings annual “Quality of Life” survey, Vancouver was voted the 4th. best place in the world to live. Vancouver has the highest property prices in Canada and after Toronto it’s the most expensive city to live in.

Average House Prices in Canada, (September 2009) Canadian Dollars

Vancouver $611,000
Toronto $407,000
Calgary $395,000
Montreal $285,000
Halifax $234,000

Get more info on Real Estate in Canada and Worldwide.

1 Vienna, Austria
2 Zurich, Switzerland
3 Geneva, Switzerland
A tie for 4th. place:
4 Vancouver, Canada
4 Auckland, New Zealand
6 Dusseldorf, Germany
7 Munich, Germany
8 Frankfurt, Germany
9 Bern, Germany
10 Sydney, Australia

Find out more about buying property and real estate in these countries