Canadian investors snapping up Valley homes

Catherine Reagor
The Arizona Republic
Apr. 9, 2008 12:00 AM

Canadian investor Trevor Matheson has taken an interest in metro Phoenix's real-estate market. So much so that he plans to buy six homes in the area over the next year.

"There are definitely deals to be found in Phoenix," said Matheson, who plans to hold onto the properties for at least three to five years.

Matheson is among a growing group of investors from north of the border converging on the Valley's real-estate market to take advantage of falling home prices and a weak dollar.

Last year, 752 Canadian buyers purchased Valley homes, according to the real-estate data firm Information Market. That's almost double the number in 2006 and even in the boom years of 2004-05. Though Canadians account for only small part of the Valley's total housing market, their interest is growing, and that's giving home sales a boost. Through mid-March of this year, 381 buyers from invested in metro Phoenix homes.

Valley real-estate agents, who have seen home sales fall dramatically during the past few years, are abuzz about all the calls and visits they are getting from Canadian clients.

"I am working with five different Canadian buyers now," said Diane Watson of the Scottsdale office of Realty Executives. "Many Canadians are seeing the weak dollar and what a great long-term investment Arizona real estate is going to be."

Short-sale bargains

Matheson purchased his first Valley home in January. Watson found him a house in north Phoenix's Kierland area that sold for $785,000 in 2006. The owners were facing foreclosure, and Matheson got it through a short sale for $470,000. Short sales let sellers avoid foreclosure, but a lender has to first agree to the price, which is less than what is owed on the home.

Matheson is looking to sell six homes in Edmonton, Alberta, to buy homes here. He is selling at the peak of the market in Edmonton, where the oil industry is big and the economy is booming as a result of record-high gas prices.

Canadian buyers are helping the Valley's sagging housing market, said Amy Swaney, vice president of Artisan Lending of Phoenix.

But they aren't typically getting financing through local lenders because lenders have pulled back on all types of investment loans as part of the mortgage meltdown.

Matheson is using a Canadian line of credit to buy his Valley properties to protect himself against fluctuations between the U.S. dollar and the Canadian dollar, known as the loonie. The loonie was worth about 70 cents to the dollar five years ago, but it's now almost equal.

Lowballing is risky