TORONTO - Philip McKernan was on a treadmill at a gym in Edmonton in September 2007 when a great roar of joy went up around him.
"I looked around assuming that the Oilers had won the playoffs or they'd gotten into the playoffs or something," McKernan said.
But hockey wasn't the cause for celebration. Instead, it was the first time the loonie had reached parity with the U.S. dollar since the 1970s.
McKernan, who's from Ireland but has lived in Canada full-time for two and a half years, said he was "amazed" by the reaction and has never understood the importance Canadians place on parity.
And now that the loonie is nearing parity again - it closed Friday at 96.32 cents U.S. - he's cautioning Canadians against making impulsive financial decisions solely because of the strength of the dollar, particularly when it comes to real estate.
"When the dollar hit par in (2007) there was a sudden rush south of the border for people buying real estate, and to make a decision on a differential of 10 or 15 per cent on a currency is absolutely and utterly insane, in my opinion," said McKernan, who recently co-authored a book on the topic called South of 49: The Canadian Guide to Buying Residential Real Estate in the United States.
McKernan said a high loonie can certainly be an added bonus if you're planning to buy property in the U.S. anyway, but it shouldn't be your prime motivation.
"If their motivation is based on the fact that there's a deal to be had south of the 49th parallel... I believe personally that's the wrong motivation," he said.
For example, the people who bought property when the loonie rose above parity in 2007 are probably kicking themselves now, as the U.S. housing market has subsequently taken a severe beating from the sub-prime mortgage crisis.
"The savings they thought they'd made, the steal they thought they had bought, has now probably dropped below any savings they ever made in currency," McKernan said.
However, there are many who disagree with McKernan, saying the housing crisis in the States combined with the strong loonie has created a "once-in-a-lifetime opportunity" to buy property south of the border.
Canadian Snowbird Association spokesman Michael MacKenzie said he's seen condos and other properties on the market in Florida for less than half the price they would have sold for two years ago.
However, that doesn't mean Canadians should run out and buy without doing their homework.
First, it's important to decide whether you're looking for a so-called "lifestyle property" or an investment.
If you're looking for a lifestyle property - a place in a warmer climate where you can escape from the Canadian winters, for example - MacKenzie recommended finding a rental property in the area first so you can get a sense of the neighbourhood before you decide to buy.
And if you're looking for an investment property that you can rent out to someone else, McKernan recommended doing extensive research first.
"You've got to look at rents in the area, you've got to look at the rental profile in the area, you've got to even go down and go to the local economic development office, for example, and get a sense of the plans," he said.
David Levine, international tax manager with financial advisory firm Keats, Connelly and Associates, added that the U.S. taxation system can be quite different from the Canadian one and it can catch uninformed Canadians off guard.
For example, Florida - a favourite locale for central and eastern Canadians looking to buy vacation properties - doesn't have an income tax, which means higher property taxes, especially for out-of-state residents.
Additionally, the American estate tax system taxes any estate belonging to a non-U.S. citizen worth more than $60,000. Levine says any Canadian with property worth more than $60,000 should develop an estate plan so their beneficiaries aren't left with a huge tax burden after they die.
Another issue facing Canadians hoping to buy property in the States is it has become increasingly difficult to qualify for a mortgage south of the border since the sub-prime meltdown.
But with housing prices so low, there are ways around this.
"If Canadians can come in with cash and not have to worry about trying to raise a mortgage down here, then it's really the perfect opportunity for them to buy right now," Levine said from his office in Boynton Beach, Fla.
MacKenzie said he's also seen Canadians use lines of credit from Canadian banks to finance home purchases down south.
"You usually wouldn't see people taking those types of steps, but the deals are so good and I think there's a feeling that this is a once-in-a-lifetime opportunity," he said.
While there have been recent signs of stability in the U.S. housing market after three years of plunging prices, record foreclosures persist.
The number of households caught up in the foreclosure crisis rose more than five per cent from summer to fall as a federal effort to assist struggling borrowers was overwhelmed by a flood of defaults among people who lost their jobs.
The foreclosure crisis affected nearly 938,000 properties in the July-September quarter, compared with about 890,000 in the prior three months, according to a report released last week by RealtyTrac Inc. That puts foreclosure-related filings on a pace to hit about 3.5 million this year, up from more than 2.3 million last year.
Oilers, Snowbird Association, Connelly and Associates
United States, TORONTO, Edmonton Ireland Canada Florida Boynton Beach, Fla
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