Canadians are largest foreign buyers in U.S.: Most homes were bought in Florida

Nonresident foreign buyers purchased about 119,000 homes in the United States from April 2016 to March 2017, according to the National Association of Realtors, or about 2 percent of all homes sold.[1]  The largest number of nonresident buyers were from Canada, the second most from China and third most from Mexico.  Buyers from these three nations accounted for 41 percent of the homes bought by nonresident foreign buyers. Since Canadians were the largest foreign buyer group, with 25,000 homes bought this past year, let’s look at where and why they bought.

About 69 percent of the Canadian population live in the eastern portion of the country, stretching from Ontario to the Atlantic Ocean.[2]  This population distribution mirrors the locations in the U.S. where Canadians buy homes, as about 7-in-10 homes were purchased in the eastern U.S. and the rest in the west.  Canadians who live in the eastern provinces tend to buy in the southeast of the U.S., and those in the western provinces buy in the southwest of the U.S.  (Figure 1) For example, 9-in-10 Canadians who live in Quebec and the Atlantic provinces and 8-in-10 who live in Ontario bought in Florida.  In contrast, 8-in-10 Canadians from Alberta and 9-in-10 from British Columbia bought homes in the western U.S., primarily Arizona, California, and Washington. In the year ending March 2017, 64 percent of the homes bought by Canadians were located in Florida and 11 percent in Arizona. (Figure 2)

With three-fourths of home purchases in Florida and Arizona, the location of the purchases indicates a strong preference to acquire a winter retreat. And with the Global Financial Crisis and drop in home prices from 2006 through 2011, prices in many areas in these states are less than in Canada.  For example, the Canadian Real Estate Association reported that the average home purchase price in Canada during May 2017 was $453,300, measured in U.S. currency.[3]  In the Toronto metropolitan area the average home sales price was $600,000 and in Vancouver $721,100, again measured in U.S. currency.  These prices are well above the sales price in the metropolitan areas that have been most popular with Canadian buyers.  The five most popular, accounting for more than one-half of Canadians’ purchases last year, were Miami, Phoenix, Tampa, Cape Coral, and Orlando. And because these areas were hit hard by the foreclosure process, prospective buyers can often buy an REO or short sale for an even lower price. (Figure 3)

Note: Andrew LePage prepared the tabulations for the exhibits.

^[1] National Association of Realtors®, 2017 Profile of International Activity in U.S. Residential Real Estate, pp. 12 and 15, https://www.nar.realtor/sites/default/files/reports/2017/2017-profile-of-international-activity-in-us-residential-real-estate-07-18-2017.pdf

^[2] Statistics Canada, National Household Survey 2011, population in private households, http://www12.statcan.gc.ca/nhs-enm/2011/dp-pd/prof/index.cfm?Lang=E

^[3] Canadian Real Estate Association, Composite Benchmark price, using May 2017 average exchange rate of $1 U.S. = $1.36 Canadian, http://www.crea.ca/hpi-tools-terms-of-use/

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