The Competition

This article was recently featured in the American Chronicle, previous to that the Miami Herald. Florida is competition for Vallarta, not just for the Canadian market, but also the Mexican market:

Nearly 800 Canadians will jam a hotel ballroom near the Toronto airport Sunday to hear the gospel of Florida real estate. Lured by rock-bottom prices, international buyers are now flocking to buy Florida properties. It’s especially true in countries where the currency is strong against the dollar.
“We’re telling Canadians this is a once-in-a-lifetime opportunity — the perfect storm,” said Brian Ellis, who heads Toronto-based Florida Home Finders of Canada. “The prices are just incredible and the Canadian dollar has been so strong.”
At least three of five buyers in the Greater Downtown Miami condo market are coming from abroad, estimates Jenny Huertas, international sales director for Condo Vultures, a real estate advisory and research firm.
Luxury condos are once again popular among Latin America buyers who purchase them as investments but also as a home base while their children attend school here, they attend to business interests or escape strife at home.
But for his Canadian buyers, Ellis scours South Florida for condo units at around the $150,000 price point. “We’re basically the Wal-Mart. We’re for the average Joe.”
And these days average Joe Canadian can afford much more. For decades the U.S. dollar was worth more than the Canadian dollar and buying in the U.S. was always more expensive for Canadians. But in September 2007, the Canadian dollar reached parity with the greenback for the first time in 31 years. It fell back again, but now the Canadian loonie, which takes its name from the loon pictured on the one-dollar coin, is near parity at around 95 cents.
So Ellis has been offering his Florida real estate seminars to packed houses in Ontario and is thinking about taking the show on the road to Montreal. There was so much interest in the latest seminar that he had to schedule two sessions for 400 people each this Sunday. Most of his Canadian buyers are what Ellis calls “end-vestors,” meaning they plan on renting a unit out for now with an eye toward using it themselves down the road.
Two sessions for 400 people each? That’s a lot of prospects. I like that “they plan on renting a unit out for now…”, what’s the chance of that?
Though Home Finders is now working with one Sunny Isles Beach property where condos are listed for up to $350,000, the Sun Vista Gardens in Tamarac is a more typical offering. There, buyers can find a one-bedroom for under $75,000 and a two-bedroom for under $100,000. That same one-bedroom, used to cost $190,000, according to Florida Home Finders’ website.
Under $75,000 gets very hard to compete with in Vallarta. And that’s quite the drop from $190,000.
Ellis said he’s actually having a hard time coming up with enough Florida properties in the $150,000 range. Of course, he’s picky. He’s looking for good value, a good location and properties without legal complications. Most of the Canadians want condos, but Ellis said he has some requests for single-family homes.
If he’s lacking in properties in the $150,000 range he should start looking at Vallarta; lots to choose from down here.
Meanwhile, Ellis keeps telling Canadians what a great deal Florida is: “We believe Florida is in for quite a rebound. We just don’t know when.”
Ahh, yes, when will it rebound? Recent market numbers show that the US real estate market is still reeling. And the Canadian market, have they just begun a downturn? Lots of chatter online about this market cooling down rapidly.
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