What’s the Canadian real estate market doing? I asked myself this question at the end of last season..about June of this year. Not having a huge number of Canadian buyers in my real estate sales, it was interesting to hear all the agents lamenting about the fleeing of Canadians from our market. We do have a large number of Canadians who purchased their Winter Vacation homes in the desert. Our gorgeous winters, and quick flights to Vancouver certainly helped this market. But also..Canadians LOVE a deal!! When we were in recovery from our own real estate bomb, which ended about 4th quarter of 2011, scores of Canadians and other International buyers and investors, as well as our own Fix-n-flippers, snapped up bargain properties. We have been moving laterally for the past several years in our price/sf. real estate closings, and our market has largely stabilized. An interesting read this morning in the Vancouver Sun, caused me to think about the Canadian real estate market and how it might affect our own Coachella Valley real estate market. Huge Tax Windfall highlights BC’s real estate dependence.
I have definitely felt the results of Canadian sellers putting their properties on the market since last season and through the summer. Their dollar is down approx. 20%, so if they purchased really low here, they stand to make some money, and many feel pressure to get out NOW. Unfortunately, all those listings coming on at the same time caused our inventory to shoot up, creating pretty much of a buyers market the past year. I also am finding that my sellers are NOT willing to negotiate much, and neither are the buyers! A stalemate. Last week, a Canadian couple who had been renting here every winter decided it might be time to buy…IF I could find a seller willing to negotiate. We did. The seller, a local, had bought high, and was willing to post a loss, while my buyers did have to increase their initial offer to a bit more than they had hoped. Working with another Canadian couple that sold their vacation home over the summer, and are now looking to purchase a larger home at a nearby gated community. Feelings that our local market is more stable than the over inflated Canadian real estate market is.
Our local market feels stable to me. We are still well below price/sf for residential properties that we were at during the peak years of 2005-2006, and we haven’t priced ourselves so high that workers cannot afford to get into an entry level home. Although the price of that entry level home HAS been driven up by more Loans becoming available, plus investors jumping into the Lease Property market. Because I deal in Land and Equestrian Properties, my land sales keep me focused on what the local “market for dirt” is doing. I was showing Land last week, and my buyer made a bold statement during our tour. “I am not buying stocks right now- too risky. I am land banking, and I’m doing it here in the Eastern Coachella Valley.” Hmmm…there has definitely been an uptick in Commercial and vacant Land sales, and small working farms are tough to come by if you aren’t willing to pay a good price/acre. I have some great farms coming up for sale for next season-stay tuned!
Overall, I think the hyper inflated Canadian market, coupled with the new 15% tax on investor purchases in the BC region, PLUS our stable local real estate market, will bode well for 2017. Extreme profits? NO. But, after having listed, worked and closed dozens and dozens of Short Sales during our crash, I do not WANT to see our local market zoom up like the Canadian market appears to have done over the past 3 years. Too much profit, too fast. If it feels too good to be true, it just may be! Here’s a video of one of my 20 acre farms located in Thermal. Priced at $900,000 or just $45,000/acre, it’s one of the few smaller, working farms available in our Coachella Valley. CORRECTION: Video states purchase price of $700,000. OOPS! Wrong-this farm is $900,000!!