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This study investigates the influence of foreign investment on U.S. residential real estate values. The study uses the Point Roberts, Washington, residential housing market as its focal point, because the market is dominated by Canadian investors and, thus, provides a very good laboratory environment in which to examine the foreign impact on a U.S. market. Factors that affect residential real estate values in this market include not only the general market supply and demand conditions, but also the exchange rate that is faced by the majority of the buyers and sellers. The findings of this study provide insights relevant to other markets that have many Canadian participants such as the border areas of Michigan and New York and certain markets in Florida. Additionally, the results could have implications for other cross-border markets in the world or any other market where foreigners from a single country or area of the world are a factor. Previous research on foreign residential investment in the United States was conducted by scholars N.G. Miller, M.A. Sklarz and N. Ordway. These authors investigate Japanese purchases of upscale homes and condominiums in Hawaii following the dramatic appreciation of the yen relative to the U.S. dollar during the mid-1980s.