J. Pat Carter/AP
A for sale sign hangs in front of a Homestead, Fla., home. In certain places more than half of the homes sold are in one stage of foreclosure or another.
A for sale sign hangs in front of a Homestead, Fla., home. In certain places more than half of the homes sold are in one stage of foreclosure or another. J. Pat Carter/AP
In especially troubled housing markets such as Florida, foreclosures are down, four years into the housing crash.
But that's thought to be just temporary. Sales are up in Florida, but in some areas more than half of those sales involve foreclosures.
There's one group of homebuyers, however, for whom market conditions couldn't be better: Canadians.
A Piece Of Florida Sunshine
The cars in a parking lot at Walmart in Hallandale Beach, near Fort Lauderdale, tell the tale. About 1 of out every 10 vehicles is from Canada. It's February; the weather is warm in Florida, so many are visiting tourists. But other Canadians are putting down roots.
One recent transplant, Doug Flood says, "If there ever was an 11th [Canadian] province, it probably would be Florida."
Flood moved to Florida from Toronto in 2008. A few years later, he got into real estate. He now specializes in helping other Canadians who want their own piece of Florida sunshine.
As it turns out, there are a lot of them. Canadians are the largest single group of foreign homebuyers, accounting last year for some 8 percent of total residential sales in Florida.
The maple leaf has long been a familiar symbol in Florida beach communities, on both the Atlantic and Gulf coasts. But over the past several years, Canadian visitors have increasingly become homebuyers.
Flood calls it "a perfect storm."
"If you're Canadian," he says, "you've got very low interest rates at home if you want to borrow against your house. You've got a foreign exchange par, dollar-for-dollar. And prices down here that are 40 to 50 percent lower than what they were five years ago."
Canada Avoided The Housing Crash
And here's another factor: Canada largely avoided the collapse in housing prices that devastated American homeowners and the U.S. economy.
Because of tighter financial regulations, things like subprime lending and securitized mortgages are unknown in Canada. Foreclosures are rare. So Canadian real estate steadily appreciated while property values in Florida, Arizona and other hard-hit U.S. markets went into the tank.
Brian Ellis, with Florida Home Finders of Canada, a real estate company based near Toronto, says, "It's put a lot of us in a very, very strong position in that we do have a lot of equity in our homes. And now, we can take some of that equity out, pay cash for either an investment property or a second home in the state of Florida."
Ellis holds seminars in Ontario and Quebec for people interested in buying homes in Florida. His company mostly markets new homes in developments where prices are good and where it can assure clients there are no hidden problems, such as underfunded homeowners associations or Chinese drywall.
Most buyers, Ellis says aren't planning on moving to Florida. They're investors, "all looking at buying property to rent out today to generate cash flow." Ellis says you can't do that in most major cities in Canada. "You can't buy property and be cash-flow positive. Not even close," he says.
There are wealthy Canadians buying multimillion-dollar beachfront homes. And there are people like Dennis Kivlahan, who recently bought a two-bedroom condo in Fort Myers, Fla., sight unseen.
Kivlahan is a high school history teacher from Ajax, Ontario. He used money from a home equity loan to pay $56,000 cash for the property in Florida.
"I liked the price. It was a very straightforward sale," he says. "We went on vacation there myself, my wife and children. And I saw the unit about three months after I purchased it."
Kivlahan is renting it out with the idea of possibly moving to Fort Myers when it's time to retire.
It's not just individual homebuyers taking advantage of low Florida prices. The Minto group, a Canadian homebuilder, recently bought nearly 1,000 lots near Tampa.
For Canadians, it is an investment and something more — a reminder in the depths of winter, they own a place where it's actually warm.
In a recent phone interview from his home in Ajax, Kivlahan said, "You know right now, as we speak, it's about minus 20 with the wind chill, so I wouldn't mind being down there."
That as much as anything explains why, through boom and bust, Florida real estate eventually always bounces back.