The Florida Real Estate Market is Hot and Benefits Canadian Sellers
It is absolutely a great time to be a Florida Real Estate Seller.
As a licensed Florida Realtor® I help, market and advise on real estate investments, second homes and commercial properties for Canadian and International clients.
As a real estate agent with Coldwell Banker Realty in Florida I talk with out of state Florida property owners everyday and the general feeling among them is now is the time to market and sell Florida property.
I have dealt with several properties recently that could not be given away between 2010 and 2014 that are now receiving multiple offers and are under contract in less than a few weeks.
The combination of present market factors creates an opportunity for property sellers unlike any other in recent years.
Here are my Top 5 Reasons Canadian Florida Property Owners Need to Sell in 2020.
1. Low, Low Inventory
Currently, active listings throughout Florida are down 58% from the levels of inventory in 2011, with more buyers looking to buy than sellers trying to sell.
2. Historically Low Mortgage Rates
Today’s low interest rates allow buyers to pay higher sales prices due to lower interest for financed transactions while keeping their monthly costs down. This combination of factors has caused sales prices to increase tremendously.
Click Here to See Today’s USD to CAD Rate
3. Current US Dollar vs. Canadian Dollar Exchange Rates
As a Canadian owner, you have an added benefit of the change of exchange rates over your time of ownership. The exchange rate now favors you as a seller.
If you purchased Florida property when the exchange rate was $1.03 CAD, there would be an opportunity to sell in 2020 at an exchange rate of $1.33 in 2020. That alone represents a 33% average increase in value on the investment you made.
A client purchased a condo in Clearwater Beach, FL, for USD 165,000 (CAD 169,950) in June 2010. In an off-market sale direct to a qualified buyer, the condo sold in March 2020 for USD 258,000 (CDN 343,140). The appreciation was 56%! The seller profited USD 93,000 (CDN 123,690) before closing costs and commissions.
The client also profited around $77,400 on the exchange rate increase from $1.03 CAD to $1.33 CAD.
Overall the clients profited $170,400 on the value and exchange rate increase alone! Their overall Canadian Dollar Equity was $343,140!
This is a great example of a deal that did benefit a Canadian Florida real estate investor. I would love to do a market analysis for your Florida property to give you a more precise evaluation – more on that below 🙂
Please Note FIRPTA withholding tax. This is equal to 15% of the gross sale price. If a property sells in September 2020, there would be a waiting period until February 2021 when the tax forms are ready.
Canadian clients are encouraged to sell in the second half of the year to minimize the wait time on the withholding tax refund. Along with the withholding tax, you will be required to file a U.S. tax return to report the sale of the property.
In Canada, the property sale will also be reported. The gain reported will factor in the foreign exchange rates at the time of purchase and sale.
In the above example, you would have proceeds of CAD 363,780 (USD 258,000 sale price x presumed 1.41 exchange rate) and your cost was CAD 173,250 (USD 158,000 at the time of purchase). Of the CAD 186,250, half of the amount (CAD 93,125) will be subject to tax.
4. Travel Restrictions, Unable to Use the Property
With the travel restrictions and government mandates, many Canadian Florida property owners are unable to visit, utilize, and or lease their Florida properties as they have in the past. These are indeed uncertain times and hope this will change for my friends from the North.
5. Mortgage and Exchange Rate Changes
There is no exact answer about what the Florida real estate market will do and how volatility will affect it. Exchange and mortgage rates could change. Just a slight shift either way between mortgage and exchange rates and the potential value from the sale of your Florida real estate could vanish.
Hold or Sell Florida Real Estate?
This depends on your situation and real estate investment goals. A potentially large profit may disappear if the Canadian dollar strengthens versus the American dollar. Clients have used part of their sales proceeds to reinvest in another property in Florida. If you hold your Florida real estate, you could be maintaining a property with limited use due to travel and quarantine restrictions.
There is No Better Time Than Now
In 25 years as a Florida real estate investor, I have never experienced a solid seller’s market like this one.
A property in 2013 that took 9 months to find a buyer will get multiple offers within 3 weeks in 2020.
Multiple Factors that Benefit Canadian Florida Real Estate Sellers
With a combination of:
Active Qualified Buyers
Low, Low Inventory
Low Mortgage Rates
Rising Sales Prices
Decreasing Days on Market
Currency Exchange Rates
AND with the uncertainty of what the market will do in the future, it makes absolute sense to Maximize your Return in 2020.
I hope you found this information valuable as I look forward to connecting and helping you with your Florida Real Estate needs.
I would be happy to provide you with an equity evaluation of your Florida property to help you see where your position would be in today’s market.
There is no obligation or cost to you as it is a service I provide to all of my real estate clients.
If you are looking to buy, sell, or invest contact Duff today. 813-413-5966
Who represents and works with you means everything.
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