Canadians have historically been huge fans of Palm Springs- the perfect escape from cold winters, flying on direct flights from Canada directly to Palm Springs International Airport! During our winter season, Palm Springs feels like "Little-Canada" based on the Canadian license plates seen all over the Coachella Valley! Many have winter residences in Palm Springs, and we kindly refer to these visitors and 2nd home owners, as "Snowbirds"
However, the recent devaluation of the Canadian Dollar and the increased valuation of the US $, has made some Canadians hesitant to purchase in Palm Springs in recent months.
Below- is a well stated article incuding supporting statistics, that maybe now really IS the time to buy for Canadians after all-
Why Canadians Should Buy Now
of Currency Values
Home values have sky rocketed and conversely plummeted over time. The highs and lows of California home prices have averaged out at approximately 7% annual increase over the previous 70+ years. If one wanted to take a conservative approach to future home price increases and use only 5%/year for long term average increase, a $500,000 home today would increase in value to $638,140.78 in 2020, just five years from now. The money one thinks they are saving by waiting for the Canadian and US dollars to equalize in values is lost to the rising cost of the home.
It’s a lose/lose proposition if you don't buy now. You lose by missing out on owning your dream desert home and you can experience significant financial loss by waiting.
There is a WIN/WIN solution for Canadian home buyers.
The time to buy is now! You get today’s lower home price, today’s lower interest rates, and today’s lower monthly payments. Live in your new home now and pay the loan off when you decide the value of the exchange rate is where you are comfortable.
Foreign National interest rate loans are currently available for either 3 Years @ 4.25%, 5 Years @ 4.375%, 7 Years@ 4.75%. Lower rates are available for the same term periods for dual citizenship buyers. The average US 30 year fixed rate over the past 70 years is over 8%. Rates are anticipated to rise as the US economy improves.
The Canadian dollar was significantly stronger than the US dollar only 2 years ago. Currently the US dollar is significantly stronger than the Canadian dollar. The swing in values is truly historic and was primarily caused by ongoing effects of the international financial crisis.
No one knows when the Canadian and US dollar will be equal in value. As an example, the Canadian dollar improved by as much as 7% over the past couple weeks against the US dollar. Most all economists agree the US dollar is overvalued. The over valuation needs to balance out if the US wants to export goods and stimulate the US economy.
The pressure is on for equalization and balance.
Fluctuation between the US and Canadian dollar values will continue for an unknown period. Today’s historic over reaction in values is artificial and temporary. YET OUR LIVES ARE NEITHER ARTIFICIAL OR TEMPORARY!
Is putting off the purchase of your new home due to dollar valuations in
your best financial interest?
We believe the facts say no.
As time ticks by while you wait for the right valuation of dollars, housing costs continue to escalate. The reason for the continuous increase of home prices in California is primarily due to the consistent increase in population.
Home prices are driven by supply and demand. California's population (the demand) is growing by the hundreds of thousands each year. The supply of housing available in Southern California won't be able to keep up with the population increase in the coming years. As the demand for housing increases, home prices will only be driven up.
The time to buy is now.
We have worked with hundreds of Canadian Buyers over the past 15 years at The Paul Kaplan Group. If you've though about exploring the idea of buying in Palm Springs, please contact us- we're here to answer any questions and can help you find that perfect desert home here in Palm Springs.