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The Influence of Canadian Investment on U.S. Residential Property Values

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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.

Suggested Citation

  • Earl D. Benson & Julia L. Hansen & Arthur L. Schwartz, Jr. & Gregory T. Smersh, 1997. "The Influence of Canadian Investment on U.S. Residential Property Values," Journal of Real Estate Research, American Real Estate Society, vol. 13(3), pages 231-250.
  • Handle: RePEc:jre:issued:v:13:n:3:1997:p:231-250
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    References listed on IDEAS

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    1. Joe Peek & James A. Wilcox, 1991. "The Measurement and Determinants of Single-Family House Prices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(3), pages 353-382.
    2. Clapp, John M & Giaccotto, Carmelo, 1992. "Estimating Price Trends for Residential Property: A Comparison of Repeat Sales and Assessed Value Methods," The Journal of Real Estate Finance and Economics, Springer, vol. 5(4), pages 357-374, December.
    3. Bradford Case & Henry O. Pollakowski & Susan M. Wachter, 1991. "On Choosing Among House Price Index Methodologies," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(3), pages 286-307.
    4. Palmquist, Raymond B, 1980. "Alternative Techniques for Developing Real Estate Price Indexes," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 442-448, August.
    5. Donald R. Haurin & Patric H. Hendershott, 1991. "House Price Indexes: Issues and Results," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(3), pages 259-269.
    6. Gatzlaff Dean H. & Ling David C., 1994. "Measuring Changes in Local House Prices: An Empirical Investigation of Alternative Methodologies," Journal of Urban Economics, Elsevier, vol. 35(2), pages 221-244, March.
    7. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
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    Cited by:

    1. Gao Lu Zou & Kwong Wing Chau, 2015. "Determinants and Sustainability of House Prices: The Case of Shanghai, China," Sustainability, MDPI, Open Access Journal, vol. 7(4), pages 1-25, April.
    2. Steven C. BOURASSA & Martin HOESLI & Jian SUN, 2003. "The Price of Aesthetic Externalities," FAME Research Paper Series rp98, International Center for Financial Asset Management and Engineering.
    3. Seong-Hoon Cho & Dayton Lambert & Seung Kim & Roland Roberts & William Park, 2011. "Relationship between value of open space and distance from housing locations within a community," Journal of Geographical Systems, Springer, vol. 13(4), pages 393-414, December.
    4. Earl Benson & Julia Hansen & Arthur Schwartz & Greg Smersh, 1999. "Canadian / U.S. Exchange Rates and Nonresident Investors: Their Influence on Residential Property Values," Journal of Real Estate Research, American Real Estate Society, vol. 18(3), pages 433-462.
    5. François Bonnieux & Gildas Appéré & Abdelhak Nassiri & Muriel Travers, 2008. "Évaluation des bénéfices environnementaux par la méthode des prix hédonistes : une application au cas du littoral," Économie et Prévision, Programme National Persée, vol. 185(4), pages 47-62.
    6. Jay Mittal, 2017. "Valuing Visual Accessibility of Scenic Landscapes in a Single Family Housing Market: A Spatial Hedonic Approach," ERES eres2017_1, European Real Estate Society (ERES).

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    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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