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| The Influence of Canadian Investment on
U.S. Residential Property Values Author: Earl D. Benson, Julia L. Hansen, Arthur L. Schwartz, Jr., and Gregory T. Smersh Start Page: 231 Abstract: This study is an
examination of the impact of foreign investors on an American residential real estate
market. Point Roberts, Washington, a real estate market that is dominated by Canadians, is
the focus of the analysis. Utilizing a ten-year database of home sales, the empirical
analysis suggests that the Canadian/U.S. dollar exchange rate and market conditions in
nearby Vancouver, British Columbia, strongly influence Point Roberts residential property
price levels. A rising Canadian dollar seems to motivate increased demand for Point
Roberts property by Canadian investors, for example. The sensitivity of real estate prices
to exchange-rate changes appears to be a three-to-six-month lagged function. In general,
it appears that a higher Canadian dollar will increase the Canadian demand for Point
Roberts real estate which, in turn, leads to higher transaction prices. In addition,
transaction prices in Point Roberts are slightly more volatile than are prices in the
Vancouver market. |
