Canadian Demand for U.S. Housing Cools as Political Tensions Rise

• No Canada: For a number of reasons, Canadians are turning away from investing in American property.

• Inflation games: The Fed is signaling rate cuts, but the reasons behind them could spell deeper trouble for the economy and real estate.

• Silver shift: Larry Silverstein is betting big on Bellevue as Seattle stumbles.

• Parking + EV webinar: Join Greystar, SWTCH, Parkade, and Propmodo for a conversation about how tech is eliminating friction and wasted space from outdated parking while increasing revenue. Sign up

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Canadian Demand for U.S. Housing Cools as Political Tensions Rise

Tariffs, currency woes, and uncertainty slow foreign demand

Canadian homebuyers, once the most reliable foreign players in the U.S. residential real estate market, are starting to pull back. A combination of diplomatic friction, economic headwinds, and contentious political rhetoric is eroding interest from the north just as the American housing market enters a vulnerable phase.

In 2024, Canadians accounted for 13% of all foreign residential real estate purchases in the United States, ranking them as the top international buyers, according to the National Association of Realtors. Early data from 2025 shows signs of retrenchment. In Arizona’s Maricopa County alone, Canadian owners have listed over 700 homes for sale in the first quarter, a dramatic increase from just 100 during the same period last year.

In some cases, the shift is emotional. “People have absolutely been turned off by the talk of annexation,” Miles Zimbaluk, a Saskatchewan native who runs cross-border real estate services in Arizona, told USA Today. He says the harsh political messages from Washington have led many Canadians to reconsider owning property in the U.S. Others are holding off on new purchases.

Data from Realtor.com supports the downturn. Canadian users still represent the largest share of foreign interest online, but their proportion has decreased to 34.7% in the first quarter of 2025 from 40.7% in the same period last year. An economist at Realtor.com, said the slowdown isn’t a huge concern for now, but it’s something to watch. The effects are most pronounced in warm-weather, low-tax metros, such as Florida and Arizona, which have been reliably prime destinations for Canadian snowbirds and second-home buyers.

It’s not just politics fueling the retreat. Canada’s economy has been reeling from a new wave of tariffs. Oxford Economics believes Canada’s economy is in the midst of a trade-war induced recession that will last through the end of this year, unless a deal is reached to reduce the U.S. tariffs. With disposable income shrinking, even affluent Canadians are reassessing big-ticket spending.

The U.S. housing market is hardly in a position to lose buyers. April 2025 marked the slowest sales pace for existing homes in that month since 2009. Foreign capital, especially for high-end, discretionary markets, has historically helped stabilize demand during downturns.

Exchange rates have also turned unfavorable. The Canadian dollar, commonly referred to as the “loonie,” has weakened in recent months, making everything from groceries to vacation homes more expensive in U.S. dollars. For Canadians who bought years ago, now may be an opportune moment to exit, especially if they’re feeling culturally unwelcome or economically anxious.

In an era when global capital is becoming more cautious, perception matters. And for now, Canada’s perception of its neighbor to the south is changing in ways that could ripple across real estate markets from Phoenix to Palm Beach.

Overheard

Fed Rate Cuts Possible, But Stagflation Risk Threatens Real Estate

The Federal Reserve has decided to keep interest rates steady in its meeting this week, but after years of high interest rates, it looks like the Fed is finally considering more cuts to the Federal Fund rates this year. On the surface, that should be good news for the real estate industry. But the reason that the Fed is eyeing two more rate cuts this year could mean further trouble for the American economy and therefore the property industry.

Fed chair Powell explained that tariffs "are likely to push up prices and weigh on economic activity." He said that the effects of tariffs on inflation could be short-lived, but if tariffs are large enough they could create consistent inflation. Powell also said that the labor market looked good overall saying, *there is nothing troubling in the current labor market … that’s not concerning given strength in the labor force participation rate and wages.”

The worry is that the Fed could face stagflation if inflation and unemployment both rise. If that was the case, it could be hard to get consensus from the Fed board about exactly what to do with rates. If we do hit a period of stagflation, the Fed would need to weigh whether it prefers to cool inflation by further raising rates or boost the labor market by dropping them. This difficult choice could lead to indecision, which would mean an even longer period of high interest rates that would inevitably hurt real estate valuations in a slowing economy.

Silverstein Properties Doubles Down On Bellevue As Seattle Struggles Next Door

New York real estate titan Larry Silverstein is placing a confident bet on Bellevue, Washington, the tech-fueled satellite city of Seattle now home to some of the country’s most expensive condos. Silverstein Properties has recently taken full ownership of Avenue Bellevue, a luxury mixed-use development featuring two high-end condominium towers and an InterContinental hotel.

The move signals a growing shift in developer focus from downtown Seattle to Bellevue, which has attracted talent and capital from prominent firms such as Amazon, Meta, and Salesforce. Roughly 40% of Avenue’s luxury units have sold, with average prices eclipsing $2,000 per square foot, far above the local norm. A record-setting penthouse even sold for over $3,100 per square foot.

While Seattle continues to wrestle with challenges like crime and open drug use, Bellevue has benefited from its neighbor’s struggles. But regional leaders are quick to note that the cities’ fortunes remain closely interconnected, thanks to shared infrastructure and labor flows.

Larry Silverstein’s Pacific Northwest interest isn’t new. He’s been quietly active in the region for years and owns a permitted site in Seattle’s South Lake Union. But Avenue Bellevue marks his most visible stake to date in the area’s luxury market. As capital follows affluence, the 94-year-old Silverstein believes Bellevue’s star will remain on the rise.

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