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Kai Ryssdal: It’s springtime in Arizona, and the smell of cheap real estate is in the air. Investors with cash on hand have been snatching up thousands of foreclosed homes. Many of those digging up the bargains are Canadians who have the Southwest in their crosshairs.
From KJZZ in Phoenix, Peter O’Dowd tells us why.
Peter O’Dowd: The weather here is gorgeous this time of year, especially for Canadians fed up with winter. But, according to realtor Greg Swann, that’s just one of the many reasons Canadians are circling over the casualties of Arizona’s real-estate crisis.
GREG SWANN: Canadians are good at saving money. They just are. Or at least the Canadians who are coming down here to buy real estate have cash, and they have lots of it.
One of Swann’s cash-buyers just flew in from Vancouver to tour a few houses in foreclosure outside of Phoenix. The buyer’s name is Bill Chipman, and he’s the president of a startup called REI Corp Capital.
Bill Chipman and Greg Swann: So we have high ceilings in this one. Yeah. This is the lavender floor plan. I love this floor plan as a rental.
The asking price is $97,000. That’s less than half of what it was a few years ago. The entire region is scarred with empty houses just like this.
Chipman and Swann: Do we need carpet? I think it’s fine. It just needs to be cleaned. Clean the carpet.
Chipman says this is an investment opportunity of a lifetime. He and his partners are raising $30 million to buy 500 houses in Phoenix, Las Vegas and San Antonio. He says a favorable exchange rate, and a housing market that’s actually appreciating back home, have put Canadians in a unique position to buy.
CHIPMAN: When people talk about recession up in British Columbia, we say, “What recession?” Never saw it. Our dollar’s getting stronger. Our jobs are increasing. We’re very optimistic in Canada.
That optimism has driven investments in the Phoenix area. According to the real-estate research firm, The Information Market, sales to Canadians have jumped 80 percent compared to the same period a year ago. Bill Chipman says Canadian companies are mobilizing investors, sweeping up everything from townhomes to commercial strip malls.
CHIPMAN: We don’t look at ourselves particularly as a bunch of vultures. We look at ourselves as rational investors that see a very good opportunity.
It’s not just the big-shot investors who see the opportunity. School teachers and retirees are buying second homes in the American Southwest. And hey, who can blame them? Not when hot tubs and golf-course views come at such a bargain.
Maureen Porter just sold this hot tub, and the house that goes with it to a client from Ontario.
MAUREEN PORTER: You can sit out there at night and enjoy the stars. It’s an amazing opportunity. They’re thrilled about it. They’re really excited.
Porter and her husband, Arnold, are Canadian citizens. They’re local investors and real-estate agents who cater exclusively to their fellow countrymen. Their Web site, Arizona for Canadians, is designed with a strange combination of cactus and maple leafs.
PORTER: And we speak Canadian. We say “eh,” so they understand that we know what they’re saying.
The Porters say it’s been difficult for their clients to get American financing for their investments. That hasn’t mattered much since most of them pay cash. But Arnold Porter says he sees more Canadians leveraging their home equity to buy houses in the U.S. And that’s sort of what got Americans into this mess in the first place.
PORTER: I think the money will be safe down here, but if they’re borrowing too much money up there to do it, if they’re getting too aggressive in their thinking, I think there could be risks there.
At these prices, though, Arnold Porter says it doesn’t matter who you are. Big investor or small potatoes, the opportunity for cheap real estate and sunshine is hard to pass up. In fact, he says he and his wife are thinking of buying a few more houses of their own.
For Marketplace, I’m Peter O’Dowd in Phoenix.
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