Many Canadians purchased homes in Desert Ridge, a highly desired housing market located in North Phoenix, during the housing crash between 2007 and 2013. Most of the homes were virtually brand new, the Canadian economy was stable, oil prices were strong, mortgage rates were low, Desert Ridge, home prices were at historical lows and the Canadian Dollar was at historical highs which meant the perfect scenario for Canadian home buyers.
2016 Weak Canadian Dollar Leads to Canadian Home Sales in Desert Ridge
Between 2007 and 2013 the Canadian Dollar was much closer to par than it is in 2016. In fact, on an annual basis the Canadian Dollar was worth, on average, approximately 96 cents to the American Dollar during those 7 years. With the weakening Canadian Dollar and the instability of the Canadian economy Canadian’s have decided it may be time to cash out and bring some money back home. In 2011 the Canadian Dollar was par if not slightly higher than then the US Dollar. The average single family home in Desert Ridge sold for $350K US or $350K CDN. That same home in Desert Ridge, without incorporating home price appreciation is worth approximately $450K CDN in 2016. That’s $100K in gains from the difference in currency alone!
Weak Oil Prices = Weak Canadian Dollar equals the Great Canadian Sell Off…Eh!
The price of oil fell dramatically in 2015 and 2016 closing below $30 US a barrel for the first time since 2003. This has also coincided with the dramatic fall of the Canadian Dollar, which traded below 69 cents US in January 2016. The free fall in oil prices helped push the Canadian dollar very close to an all-time low of just under 62 cents in January 2002. Between 2007 and 2013 oil prices on average were closer to $85 per barrel. In 2016 oil prices have averaged around $30 – $40 per barrel.
Strong Arizona Economy = Strong Desert Ridge Housing Market
Many of my Canadian clients purchased homes in Desert Ridge in 2010 and 2011 simply as investment properties and a way to make some money as the housing market recovered. According to ARMLS statistics, the average single family home sale in Desert Ridge during 2011 was approximately $350K. As of April 25 2016, the average single family home in Desert Ridge sold for $465K an increase of 31% or $115K. So those that did buy as an investment are now selling their Desert Ridge Homes and are most definitely reaping the rewards.
Many of my other Canadian clients purchased homes in Desert Ridge as second homes in Arizona for what they thought would be forever. However, when they realize how much money they can make on both the strong appreciation of their home and the Canadian Dollar vs US Dollar they definitely think about selling. Some do and some don’t.
For the most part, those Canadians who purchased homes in Desert Ridge as a second home to get out of the cold winters of Canada are more or less staying put. For those snow birds that live in Arizona for half of the year, they hit the jackpot. The gorgeous weather, the home price appreciation, the strong US Dollar, the very low cost of living, and the direct flights to all major Canadian cities.
The Desert Ridge real estate market is once again strong and healthy. Desert Ridge Real Estate Advisors specialize in buying and selling homes in the Desert Ridge Area and have a group dedicated to working with Canadian clients. Contact Amy Koch at Desert Ridge Real Estate Advisors for a free home valuation and Desert Ridge Market update.