We’re back to late October levels on the Canadian dollar, which as of this writing is sitting somewhere around 79 cents to an American dollar.
A week ago, the CAD was around 84 cents and even touched 85 cents a couple of times in intraday trading. For those keeping score, that’s a roughly 7 percent drop in the span of a week.
This tidbit isn’t intended to kick a Canadian while his currency is down. Instead, it’s a call to consider what you can do … what you will do … when the CAD bounces back if and only if you’re serious about purchasing Phoenix real estate.
- Pick a baseline. Most of the folks I’ve talked to believe the Canadian government wants the dollar at about 85 cents to the American dollar. (Sentiment seems to vary depending on whether you’re in Eastern or Western Canada.) If you believe the 85 cent mark is the government’s baseline, does it make sense to wait for a rise back to the days of a 92-cent loony?
- Find a property. If you’re not currently receiving automated listings update, get signed up. (I can get you up and running in no time flat if you contact me through the form at the top or via e-mail.) You don’t need to make your final selection online; in fact, you’d be crazy to do so. But you ought to have your choices narrowed down to a fairly manageable number so you can move quickly when the CAD hits the mark.
- Plan ahead. Globex and HIFX are currency exchange firms through which you can move your Canadian dollars into American dollars, usually at exchange rates and a total cost far more favorable than the bank on your corner. In addition, since they trade currency in bulk, their rates are more reflective of the current market rather than the once-a-day mark to the market you see at most banks.
- Plan for the future. If you’re not ready to purchase or to convert your currency, you also can purchase forward contracts through Globex that locks in a set exchange rate. Using these, you can lock your exchange rate at a more favorable rate without having to move the actual cash and you’re still protected from currency fluctuation.
Even given the current sluggishness in some parts of the Phoenix real estate market (the retirement communities remain an exception, at least in terms of price decline), the biggest variable with which foreign buyers have to contend is the exchange rate.
Put another way, we’re not seeing real estate values decline by seven percent inside of a week. But you just saw your money make just that swing.[tags]Phoenix real estate, Canadian buyers[/tags]