When you watch the World Series of Poker on television, you quickly realize the game is as much skill as luck. Aside from the ability to “read” people (which I’m terrible at doing at a poker table, but pretty good across a real estate contract), there’s a definite skill to remaining patient, waiting for the right opportunity to arise, and then striking while the opening is there.
For Canadian residents looking to buy real estate here in the Valley, that opening started just over a year ago when the loonie first approached and then surpassed parity with the American dollar.
How wide that opening happened to be has varied over the past 13 months … at one point last November, the loonie was at about $1.06 to the dollar. It’s been lower than the dollar for much of this year, vascillating between 94 and 97 cents … at least until the past week. It’s been during this past week, despite the economic turmoil here and perhaps caused in part by the drop in oil (not to mention the symbiotic relationship between the economies), that the loonie has tumbled.
At one point yesterday, the exchange widget on my sidebar was showing the loonie at 80 cents USD. It’s now closer to 83 cents – a far cry from the hey day of $1.06, quite a bit off the 93 cents of just a couple of weeks ago, but not so far off from the Canadian government’s supposed target level of 85 to 88 cents.
This is a roller coaster ride that’s not likely to slow, not with the uncertainty here in the States. There are no guarantees, of course, but I find it likely that the loonie will come back at least into the 90s before all has been said and done. How long it remains there, should it make it, is the big question.
We’ve been dealing with a statistical anomaly for 13 months … these currencies simply are not usually at parity. Many, many potential buyers have told me over the past several months that they’re in no hurry. Which is fine, so long as they understand the cost of purchasing property is going to rise by dint of the change in exchange rates even if the cost of homes themselves remains relatively unchanged or even falls.
That’s what has happened now.
So what is a Canadian wanting to purchase Phoenix real estate to do? Keep an eye on the market, whether through listings sent to you or the websites of your choice, and look for properties that meet your criteria.
More importantly, watch the exchange rate. As I’ve mentioned before, there are currency exchange firms that offer forward contracts that allow buyers to lock in a certain exchange rate to eliminate currency risk from the equation.
What you also learn watching the World Series of Poker is there’s almost always a second chance, a second opportunity where everything aligns and you have the opportunity to pick up some chips … maybe not a monster pot, but enough chips to keep you in the game for the foreseeable future.
When that second opportunity comes around, will you be ready? If so, I’ll be waiting.[tags]Canadian buyers, Phoenix real estate[/tags]