Should I Stay or Should I Go?
How Market fears, crime and health could have a big influence on your decision
Q My wife and I are looking to buy in the U.S., but we’re worried about a number of things. Where’s the housing market going? Aren’t the laws of buying in the U.S. confusing? How can I manage a second home thousands of kilometres away?
A These are all normal questions for people looking to make the big leap into buying retirement homes.
“Canadians have always been conservative when it comes to investing,” says Glenn Purdy, co-founder and senior adviser of Triumph Financial Group, a company which advises Canadians on buying real estate in the U.S. “We have our homes and RRSPs and are comfortable with that.”
However, Purdy feels that the current “perfect storm” of real estate conditions (housing in prime U.S. retirement locations down 40 per cent from their peak, low interest rates and a strong Canadian dollar) should be enough to get even the most risk-averse snowbirds at least to start thinking about buying in the U.S. Market fears are normal but only apply if you’re looking to make a quick buck by flipping the home in six months. With current economic uncertainties, it’s unlikely that bet will pay off. The more advisable approach is to look long term with the view that the markets down south will eventually recover, just as they always have.
A firm believer in supply and demand, Purdy points to the numbers: with 77 million boomers in the U.S. and another 10 million in Canada there’s always going to be a demand for homes in the U.S. Sunbelt. And when the economy improves, the property prices will recover.
Even if you’re going to retire 10 years down the road, you can rent your property now, pay down the mortgage or buy upgrades and, when you’re finally ready, move into a home that’s likely to have appreciated in value.
Once people get over those initial fears, the rest falls into place. “The rules about buying may seem different at first, but once you start the process, you’ll find it’s almost identical to buying here,” claims Purdy. Property management companies can look after the maintenance and renting out of your property while you’re not there. Of course, any investment carries a risk. But with prices as they are now, many are viewing this as the best opportunity to purchase their place in the sun.
Q Should I be worried about higher crime rates when I travel south?
A Vacationers to the U.S. are justifiably concerned about crime rates in the regions they plan to live in for extended periods of time. However, statistical data about how safe or dangerous a state or country is can be misleading. For example, according to the FBI, Florida ranked No. 3 overall in the U.S. for crime in 2008, while California ranked 27. Does this mean snowbirds should skip Florida? Not necessarily. Florida’s and California’s rates are skewed by the fact that much of the criminal activity occurs on very mean streets in certain districts of Miami or L.A., far away from the neighbourhoods snowbirds congregate. Gated communities in Arizona and RV parks in Texas are hardly hotbeds for gangster turf wars. This does not mean that crime doesn’t happen. Last fall, police in Cape Coral, Fla., were warning residents and vacationers that thieves often target their homes when they’re away. Snowbirds are encouraged to research the crime potential of their preferred destination, and that’s a lot easier nowadays, thanks to the Internet. Punch the name of just about any town in the U.S. into a search engine, add the words “crime” and “rate” and all – or much – will be revealed. Before committing to an area, call the local police department – they can tell you which neighbourhoods to avoid. And no matter where you travel, commonsense precautionary measures are recommended. Be aware of surroundings and don’t flash the cash.
Q Are southern climates better for chronic health conditions?
A Most people assume that living in a hot and dry region like Arizona would do wonders for their arthritis. But according to Dave Sapriken, education co-ordinator for the Arthritis Society of Alberta and the N.W.T., there are no definitive studies indicating that climate or weather has an impact on how arthritis manifests. However, he adds, there is a “mountain” of anecdotal evidence about the benefits or drawbacks of certain climactic conditions.
Part of the problem is that there are more than 100 forms of arthritis, and even people with the same form often find that their experiences are completely different.
For a condition like chronic obstructive pulmonary disease (COPD), there are some guidelines but no hard rules, says Dr. Menn Biagtan, program manager for the B.C. Lung Association. Humidity may or may not be a problem; it depends on the individual. “If you live in Vancouver and you don’t have a problem with humidity, then it probably isn’t going to affect you in Florida,” she says. More troublesome for COPD sufferers is air quality. Avoid pollution, says Biagtan, adding that extreme temperatures put a strain on the body, forcing heart and lungs to work harder to keep the body cool. Altitude can also be problematic because there is less oxygen the higher you go.
All in all, carry all the medical supplies you need to cope with emergencies, have adequate medical insurance and know what medical facilities are available in the area you are visiting.