Snowbirds rush to sell U.S. homes to profit from tanking loonie

Greg Barrett and his wife, Erina, wouldn't call themselves savvy investors. But the snowbirds have just made a killing in the U.S. real estate market.

They join a growing number of Canadians who bought U.S. homesfor cheapand are now selling themto take advantage ofrising U.S. house prices and a tanking loonie. Even with added costs such as a possiblecapital gains tax, many Canadians are still coming out farahead.

"It just worked out for us and we're blessed," says Barrett, a 75-year-old retired social worker.

In 2010, thelooniewas virtually at par and the U.S. housing market had crashed whenthe Winnipeg couple bought an Arizona home to escape Canadian winters.

"It was a fabulous deal," says Barrettfrom their three-bedroom bungalow in San Tan Valley near Phoenix.

Recently, he and his 73-year-oldwifecontemplated selling to lighten the burden as they age. When theycrunched the numbers, they couldn't resist taking the plunge.

Thanks to the rebounding U.S. real estate market, theyhave just sold their Arizona home for 65 per cent more than what they originally paid.

Add the exchange rate with the loonie hovering around 71 cents US, and you could saythecouple hit the jackpot.

"In Canadian terms, it's double the boost," says Barrett. "I'm walking on sunshine, and don't it feel good," he adds, quoting a favourite pop song.

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Swamped with sellers

The Barretts'Arizona real estate agent, Diane Olson, says she's swamped with calls from Canadians itching to sell their U.S. properties to cash in.

"They are just saying, 'It's such an awesome and great opportunity.' They were not counting on the foreign exchange going to where it is," says the agent,who specializes in Canadian clients.

Olson says she has 29 Canadian-owned Arizona homes either on the market or about to be listed.

"I am zooming, zooming, it's crazy!" she says while driving on a Phoenix freeway, heading to her fourth meeting that day with a Canadian client.

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From buying frenzy to selling spree

It's a reversal from2010,when the loonie was around par. In 2011, it would hit $1.05 US. At the same time, U.S. real estate prices had taken a dive, triggered by the 2008 subprime mortgage scandal and financial crisis.

So Canadiansfrom snowbirds to investorsswooped into hotspots like Arizona and Florida to grab a piece of sunny real estate for a steal.

According to the American National Association of Realtors survey, for the year endingin March 2007, Canadians accounted for 11 per cent of U.S. home sales to international clients. But as the loonie climbed, so did Canadian deals.

FromMarch 2011 to 2012, Canadian sales more than doubled to 24 per cent, totalling an estimated $15.9 billion US.

"It was a buying frenzy," says Olson. "You could buy a brand-new house on the outskirts [of Phoenix] that was nice for $80,000 [Cdn]."

Fast forward to 2016. Thanks to a strengthening economy, U.S. house prices have shot up 30 to 50 per cent, says BMO economist Robert Kavcic.

Add the loonie's recent decline, and some Canadian sellers of U.S. homes are making big profits, even after any tax hits."They have made out like bandits," saysKavcic.

Canadians fleeing Florida

In Florida, Brent Leathwood is also seeing a surge of Canadians cashing out. The real estate agent says that when the loonie was stronger from 2009 to 2013 virtually all his Canadian clients wanted to buy.

Now, he says, about 80 per cent of them want to sell their homes in the Sunshine State.

"They're making a pile of money, some of these people," he says.

But Leathwood adds it's not just big profits that are encouraging people to sell.

He says there's a high price to pay these days when hanging on to U.S. property. Suddenlyeverything from American property taxes to electricity bills have becomemore expensive.

"A lot of these people are feeling squeezed by the ongoing monthly costs of maintaining a residence as the exchange rate continues to go against them," says Leathwood.

Both he and Olson expect the selling frenzy to continueas long as the loonie stays low.

"There's going to be a wave of money going back to Canada," says Leathwood.

The Barretts plan to keep some of their money parked down south.

They still want to spend their winters in Arizona, but from now on, they'll rent with a lot less responsibility and a lot more cash.

"I'm sitting here in paradise and I'm making money. It's just an amazing thing," says GregBarrett.