Prices of homes in popular snowbird destinations south of the border are on the rise, but still well below the peak levels, according to a new report by BMO Financial Group.
While US prices have soared 20 per cent in the past two years, they are only about half way back to their peak-high in 2006, says the Bank of Montreal’s Annual Snowbird Outlook.
For example, prices in Tampa, Fl. are down 34 per cent compared to eight years ago; Phoenix prices are down 30 per cent; Las Vegas is 43 per cent off; and Miami prices are 52 per cent below 2006 numbers.
But even as prices are expected to continue increasing in popular vacation destinations like Florida and Arizona, US housing affordability remains healthy for Canadians, said the bank.
“Foreign buyers are interested in US real estate because it’s relatively cheap when gauged against incomes and is situated in a stable/safe haven economy,” wrote Jack Ablin, Chief Investment Officer of BMO Harris Private Bank, in a research note.
Indeed, the median home price in Florida is $124,000 (USD) and $198,000 (USD) in Arizona, while the median home price for major centres in Canada is estimated at $255,000 (CND $283,360).
Florida continues to be a favourite destination for Canadians: more than 500,000 Canadians own real estate in Florida right now, representing the largest group of foreign buyers in the Florida housing market.
“We project retirement state housing prices to outpace the national average, due to increasing numbers of retirees, and abundance of capital from abroad and lower interest rates,” Ablin said.