Detroit’s Impact On Alberta Real Estate
What does Detroit’s financial emergency mean for Alberta real estate?
Detroit just announced it is filing for bankruptcy. It’s the biggest in U.S history, but maybe just the first in a long line of dominos.
Bankruptcy can be a good purging process, but can take many years to recover from before returning to health.
Windsor, ON has offered to buy the Detroit side of the tunnel. Yet, Windsor is understandably concerned it could be one more factor that reduces traffic and saps the local economy, with Windsor casinos already reporting a massive drop in U.S. tourism, plus by association to the region could dampen investment and growth even further.
Surprisingly Michigan is no longer even one of the hardest hit states in the U.S. Last month New Jersey, Maryland and Florida all saw 100% increases in foreclosure auctions, on top of surges in brand new foreclosures being filed. Fortunately, at the same time U.S. home prices have managed to crawl back a little. One index puts this home price increase at 12% year over year, but still puts U.S. home values 30 to 50% below previous peaks. Even one of the country’s most notable pieces of real estate; the Versace mansion on South Beach in Miami was just slated for the auction block, with its price being slashed from $125 million down to just $25 million.
Still the lift in prices is enabling many Canadians to sell their homes south of the border and pull money back home and invest it in Alberta where they can find more stability and far better returns.
Of course, the fall out Ontario is experiencing from all of this is only going to force more Canadian businesses and citizens to pick up and head west in search of new customers and jobs. In turn this will only make Alberta’s major metros more attractive for international companies, entrepreneurs and skilled workers seeking a brighter future.
This month we’ve seen the ripple effect of this push Calgary’s luxury home market to new record highs, with four $4 million plus MLS home sales recorded in the first couple weeks. This is great for Calgary, but at the same time is part of the trend which is pushing more new residents and businesses to Edmonton where living is less expensive, they can find more value and where there is more room to grow.