Does good news for Canadian homeowners mean good news for Phoenix's real estate market?
“Bubble Watch” has been a most popular phrase for pessimistic (or fearful) observers of Arizona’s resurgent real estate market in recent weeks. Last Saturday on That Real Estate Show, Michael Orr, Director of the Real Estate Center at the W.P. Carey School of Business at Arizona State University, continued to downplay the notion of a second bubble affecting Valley homeowners in the near future. But what about other cities? What about other countries?
A month ago, some, including the U.K. based publication, The Economist, warned of a severe correction to the once thriving Canadian real estate market, even going as far to warn of a “large bubble burst.” Given the influx of Canadian buyers in Phoenix, the implications of such a downturn would likely be felt locally. But how much would it hurt us?
“I’m not sure it’s going to have a big effect.” said Orr when asked about a potential Canadian housing crisis on That Real Estate Show last month. “We’ve probably seen the peak of the Canadian interest (in Phoenix).”
This is not to say that a Canadian real estate calamity is likely. In fact, a recent Wall Street Journal blog cited some optimistic statistics from the Canadian Real Estate Association (CREA), anticipating only a slight drop (2.5%) in overall existing-home sales from one year ago. CREA also reported a 3.6% increase in home sales in May from April, leaving some to believe Canada’s real estate market is heading for more of “soft landing” than a “burst bubble.” The former would be good news for Phoenix, as warm temperatures and sunny skies continue to provide an alluring contrast for our good friends in the north.
Get the very latest on this story and more on That Real Estate Show, Saturdays at 3pm on News/Talk 92.3 KTAR.