by Mark Bingaman
Are Canadians selling U.S. real estate because of the rise of Donald J. Trump?
Well, yes and no, but it’s not ONLY because of The Donald.
A perfect storm featuring a weak Canadian dollar, an increase in U.S. property values, and political and social upheaval in the United States has many Canadian owners of U.S. property from Texas to North Carolina eager to cash out and sell their American vacation homes and other land.
The uncertainty of the 2016 U.S. presidential election coupled with the soft “loonie” (the Canadian dollar) already had many Canadians ready to liquidate their U.S. properties.
That trend is likely to increase now that Donald Trump has claimed the American presidency and Canadians – many of whom are considered highly liberal – develop a sense of unease about spending time in a country that’s moving in a more conservative direction.
Many Canadian owners of U.S. vacation homes and other parcels of property snagged the land during and after the Great Recession of 2008-2011 when property values in the U.S. were at an all-time low.
Now that the housing market has rebounded strongly, Canadians see now as an ideal time to grab the appreciation on their investments and move along, especially with the uncertainty of exactly how a Donald Trump presidency will impact the U.S. tax rate and North American economy as a whole.
For example, Trump’s fervent isolationism and opposition to the North American Free Trade Act (NAFTA) – which Canada is a part of – could bring about wild swings in both the U.S. and Canadian economies.
There’s also the possibility that many other foreign investors – equally anxious over a looming Trump presidency – will quickly begin dumping their U.S. holdings, creating a glut of U.S. vacation homes and other properties on the market, especially in popular, sunbelt areas like Arizona, Florida, Texas, and North Carolina. If that occurs, the gains realized from property appreciation over the past several years could begin to wither away.
Skyrocketing Canadian Housing Costs
Canadians who own U.S. land also face another problem: an ongoing spike in the cost of real estate in the Great White North. The average price of a Canadian house now hovers around $450,000. This is especially true in the provinces of Ontario and British Columbia, where housing prices in Toronto and Vancouver continue to climb.
Therefore, the same folks who were able to afford a U.S. vacation home in 2008 now find themselves strapped for cash, “house poor,” and in desperate need of liquidity in order to afford their own basic housing costs in Canada. In other words, it’s time to sell the getaway home in the U.S.
Furthermore (although the actual impact may be negligible) Canadian owners of U.S. property worry that President-Elect Trump’s promised clampdown on immigration will make it more difficult for Canadians to secure visas and travel freely across the border.
The LandHub.com Solution
If you’re the Canadian owner of U.S. property, we invite you to utilize LandHub.com to list your vacation home or other land for sale.
For buyers, we’d suggest that this is an excellent opportunity for you to secure some great parcels of land and/or vacation homes at a good price. While the winds of change make it a sweet time for Canadian buyers to cash out of their investments, those same winds mean opportunity for American buyers anxious to secure the land of their dreams on LandHub.com.