U.S. Market Overview – June 2011 – http://apertureinvestment.com/presskit/MediaBackgrounder.pdf
According to the U.S. National Association of Realtors (NAR) annual survey for the 12 months ending March 31, 2011, Canadians were the largest foreign buyers of U.S. real estate accounting for 23 per cent of all sales to foreigners. Canadians bought $9.4-billion worth of U.S. real estate during the 12 months.
While most states had at least one international transaction, four states – Arizona, California, Florida, and Texas – accounted for 58 per cent of all international transactions. Approximately 61 per cent of international purchasers bought single family detached homes.
NAR President Ron Phipps says while the U.S. has always been a desirable place to own property and a profitable investment, in recent years, more foreign buyers have been entering the market to take advantage of low prices and plentiful inventory.
NAR says historically, foreign buyers have been attracted to property ownership in the U.S. for a number of reasons; U.S. homes are generally less expensive than comparable foreign properties, homes in the U.S. are viewed as a secure investment, and the U.S. market offers rental opportunities and long-term appreciation potential.
Another NAR report in April showed that all-cash sales were 31 per of total transactions, down from a record level of 35 per cent on March. Investors account for the bulk of cash purchases. Distressed homes, which typically sold at a discount of about 20 per cent, accounted for 37 per cent of sales in April, down from 40 per cent in March.
In March of this year, a survey from BMO Bank of Montreal conducted by Leger Marketing showed that one in five Canadians would consider purchasing property in the U.S.
Overall housing prices in the U.S. have fallen by 30 per cent over the past four years. However, prices in regions that are traditionally destinations for Canadian snowbirds have dropped even more. For example, according to the BMO Bank of Montreal survey, prices in Tampa have dropped 44 per cent, Phoenix fell 54 per cent, Las Vegas, 57 per cent, and Miami, 49 per cent.
Sal Guatieri, Senior Economist, BMO Bank of Montreal said the strengthening of the U.S. economy and gains in employment meant that home sales should pick up and put a floor under soft prices. This would provide an opportunity for capital appreciation for Canadians who purchased U.S. property at a low price while the Canadian dollar was high.
The Leger survey also revealed that regionally, those in Alberta (31 per cent), British Columbia (28 per cent), and the Prairie Provinces (27 per cent) are most interested in buying property in the U.S.
Recent reports indicate that the worst may be over for the housing crisis in the U.S. as the economy slowly recovers. This means there are fewer foreclosures and that the foreclosures that are happening are taking longer to process.
Aperture’s Approach to the U.S. Market
Aperture Group Inc. are the first Canadian company with a Vancouver based office dedicated to offering a full suite of services to help clients make well informed decisions for their purchases in the U.S. – for investment or as a second or recreational property.
Aperture’s team has extensive experience with bank-owned (REO) and foreclosure properties which offer the best value and require specific research and due diligence within a tight timeframe. In facilitating its services, Aperture works with a dedicated team of knowledgeable real estate experts, legal and taxation consultants, insurance agencies, contractors and property managers.
In pre-purchase consultations, Aperture works closely with clients to determine:
1. Purchasing requirements
2. Type of property
4. Estimated required gross rental returns (for investment properties)
5. The amounts clients are willing to spend on a desired property
Aperture will then locate a suitable property for their client that is currently owned by banks via foreclosure (REO), or for sale at foreclosure auctions.
All purchases made on behalf of clients in the U.S. are in cash to obtain the best possible deal. Aperture works with selected mortgage brokers in Canada who can arrange a Secured Line of Credit at competitive rates for clients based on the equity in their current home.
Aperture also provides clients with information about the best legal structure to own real estate in the U.S. to minimize taxation exposure. They do not provide legal or tax advice, but will refer clients to expert consultants in these areas if requested.
Client funds for purchasing REO properties are held in trust with a reputable local lawyer under the client’s name and control. Aperture’s fee for facilitating the purchase and all related activities will be paid from the trust account once all of services are rendered.