Canadian Snowbirds bring more spending power to Tucson
October 17, 2007
Post Tags: Canadian-Dollar-Value , Federal-Reserve , Short-Term-Interest-Rate , Tucson Real Estate , Tucson-snowbirds
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Do you remember back on September 18, 2007 when the Federal Reserve dropped two crucial interest rates by 1/2 percent? That was hailed by Wall St. as a salvation move for the economy and it did seem to quell the jitter in the Stock Market over the Mortgage Meltdown.
One of the side effects of this decrease in short term interest rates was an increase in long term interest rates. This meant an increase in the 30 year fixed interest Rate.
It also means a reduction in the interest rate paid on saving accounts and CD’s. Cash isn’t worth as much as it used to be. Maybe it depends on who’s cash.
Another effect of this move by the Fed. a reduction in the value of the Dollar. This news as gone almost unnoticed by the average US Citizen with dollars in their pockets and bank accounts. As long as we don’t spend outside the country we notice no change in what our dollars can buy. Yes, foreign goods will cost more but we have come to expect things to cost more. We don’t even give it a second thought or wonder why. We want it, we buy it, we pay for it now or eventually.
But to those who live outside the borders of the United States it means they can buy more with their currency Now than they could before. While the Canadian Dollar has slipped it is still very strong against the US Dollar which means for the time being Canadian Snowbirds wanting to hedge that value for the future will find it easier to buy Tucson Real Estate this winter than it has been in the past.
If the Canadian Dollar once again slips back against the US Dollar their investment in Tucson Real Estate will realize an appreciation when they sell that Tucson Real Estate for US Dollars and convert them back into Canadian Dollars back home.
For our neighbors to the North, welcome it looks like it is going to be a warm winter in Tucson.
