The recovery of the Scottsdale real estate market has been fueled largely by foreign investors, especially those from Canada. Data recently released by the National Association of Realtors (NAR) shows that in May, individual investors were responsible for 18 percent of Scottsdale homes sales, and in 2012, one out of every four home sales was an investment sale.
According to a 2012 report on International Home Buying Activity, also released by NAR, the total sales volume to international homebuyers was around $82.5 billion ending in March 2012. This accounts for 9 percent of all activity in 12 months.
While the major U.S. cities have always appealed most to international investors, their interest has since widened to less common areas in Florida, Texas, and Arizona. Scottsdale homes especially have become a major point of interest for Canadian buyers for a number of reasons. Here are some contributing factors to the flock of Canadian investors now turning their eye toward Scottsdale homes:
- Socio-economic trends – There are many socio-economic factors contributing to investment in U.S. real estate that do not necessarily mean political distress. Some Canadians have plans of sending their children to school in the U.S. or to accelerate their path to citizenship or residency status. There is a high demand in the U.S. for highly skilled workers on H-1B visas, which has also contributed.
- Diversifying their assets – For many foreign homebuyers, owning U.S. real estate can be a status symbol as well as a good investment. Wealthy international investors are not necessarily looking to live in the U.S., but they do wish to diversify their assets. NAR’s report shows that in 2012, only 38 percent of foreign buyers purchased U.S. homes to use as primary residences, compared to 48 percent in 2010.
- Lower home prices – Canadians make up roughly 24 percent of all international homebuyers in the U.S. This is partly because the prices of homes in Canada have risen 16 percent in the past five years, while the prices of homes in Scottsdale and other U.S. cities are still relatively low. Though home prices have recently begun to increase, we are still riding out the 11 percent drop we saw over the last five years.
- An improving market – The real estate market is in the middle of its recovery from a historical downturn and is now 25 percent up from its lows. The supply of homes in Scottsdale is especially thin and demand is increasing, prompting a steady rise in home prices. Canadian investors are looking to take advantage of still low prices and low mortgage rates while they last.
Competition for Scottsdale homes is becoming fierce, but with a truly experienced Scottsdale realtor, buying a home does not have to be a stressful experience. Check in on our page on Scottsdale real estate trends, or call me at (602) 791-0536 to schedule a time to view Scottsdale homes for sale.
Carmen Brodeur JD
Trillium Properties, LLC
9825 E Bell Road, Suite 120, Scottsdale AZ 85260