It’s Not Just the Weak Dollar
Posted Dec 6, 2007 @ 7:43 pm, Viewed by 449 Visitors, Read 451 Times.In the wake of the US dollar’s slide down the value scale, there’s been a lot of speculation that the dropping value of the dollar is likely to spur investing in the US real estate market (and foreign investment in the US in general, to be fair). While there’s some truth to the suggestion, there’s more truth to the fact that US real estate has always been an attractive investment for overseas investors. The relative stability of the US economy – which, despite the recent downturns is still one of the healthiest in the world – coupled with the political stability in the US makes this country an attractive place to own real estate.
That said, there is evidence of an increase in home sales to overseas clients in many markets, and Florida is one of the hottest. Florida offers some great benefits to those who want to own a second home overseas – wonderful climate, beautiful views, and a bustling tourist industry that makes it easy to keep a vacation rental property full year round. When you look at where the foreign buyers are coming from though, you get a much clearer picture of why the weakened dollar is making a difference in the current home market – European buyers, with the UK and Germany leading the pack, followed by South American buyers, and finally Australian buyers.
What they all have in common is extraordinarily high real estate prices back home. When you couple the high costs of home ownership in their home country with the increased buying power of their money here, it’s not surprising that many European home buyers are choosing to buy their second home, vacation home or retirement home here in Florida, where they get far more real estate for their money.
For more info read Could Weak Dollar Spur Housing Sales?
Relocating to Tampa Florida? TampaHomes24-7.com is a one-stop source for all kinds of information related to the Tampa real estate market, including Wesley Chapel real estate.
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Hi Morgan, I'm not sure what happened on the formatting. I just looked at a bunch of my previous posts and they all seem to have lost their formatting. In terms of your other question I'll follow-up with a comment tomorrow, but you're right in your circumstance the weak dollar has actually decreased your relative buying power. Calum
Calum - I have seen this impact in Bellingham, WA. Bellingham is located 30 minutes from the Canadian Border and I have personally been contacted by several Canadians interested in purchasing 2nd homes for an investment. Maybe Morgan should start charging people in Canadian Dollars ;-) Seriously though, Morgan does have a good point. Historically the Canadian economy has been hurt when the Canadian Dollar is strong compared to the US dollar because Canadians purchase more goods in the US.
Looks a lot better now Calum, much easier for the other readers to digest.
Morgan - for the short-term, I'd continue charging clients in US dollars, as it appears the Bank of Canada will be forced to follow the US FED and continue lowering the Canadian interest rate(s) in order to keep the CDN $ just below or at par with the US greenback. The Canadian economy has already started slowing down, and unless our gov't keeps the CDN $ slightly under the US, manufacturers (and all exporters) won't be able to compete. The US FED only reduced rates by 25 basis points today (Dec 11th), and most analysts have said it wasn't enough. Look for 2 or 3 additional rate decreases in the US in the first 4 months of 2008 *all of which will have to be matched by the Bank of Canada*
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Hi, let me introduce myself, I’m Calum MacKenzie. My wife Kathy and I are Tampa real estate professionals who take our business seriously… okay, so sometimes I’m not so serious, but definitely personally. Read More
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Calum, not sure if there was some formatting intended for this post, but it seems a bit jumbled. Anyways onto my comment - As you know I am Canadian. As you also know, I charge my customers in US dollars - My question is - how many potential clients in your market charge in US dollars as I do? I realize that my higher dollar increases my buying power - however in terms of actual revenue (In my own country) the dollar plummeting can be quite crippling thus disposable income (Such as that I may use to invest in a vacation home in your neck of the woods) is virtually non existent. Does this come into play at all. Thanks Morgan