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40% of the buyers here in Las Vegas are Asians. Apparently, if you invest $500k in real estate here, the buyer and his family are entitled to permanent visas, a policy Obama initiated to stimulate our RE market!
And it's no different than Miami, with the Latin buyers, which has stimulated their RE market.
So the question is, will this have a stabilizing effect on the RE market, or a destabilizing effect?
Obama didn't "initiate" it.
"The provision is part of a larger package of immigration measures, co-authored by Sens. Charles Schumer (D., N.Y.) and Mike Lee (R., Utah), designed to spur more foreign investment in the U.S." I don't even know if it passed - there was a lot of concern at the time that it would interfere with the EB5 visa program, which required the same amount of investment but the creation of 10 jobs for American citizens.
My real estate friend in Las Vegas was the one who pointed out this program to me, the $500k investment by foreigners, but he said it came about under Obama's presidency. Not that he was behind it.
When I first heard of this, I thought the buyers had to buy just one home worthy of that amount, but not so! They can buy a number of houses and rent out the ones they're not going to live in.
So the foreign buyers that came in, after the crash, like in Las Vegas or Miami, could have potentially bought up to a half-dozen houses. Not surprising then, when I get on SkyscraperPage.com and see all the new high rises under construction in Miami, and San Francisco!
Let's see them try that in Mexico!
I was talking to my real estate friend in Rosarito, this summer, and Mexico is courting the idea of abandoning their real estate restrictions (you can only lease land 29 miles from the coast) and allowing a foreign buyer to buy a property there without those lease restrictions. But, under the new rules, if passed, if you dare to rent out that property (to discourage foreign landlords) your property will be confiscated!
"The provision is part of a larger package of immigration measures, co-authored by Sens. Charles Schumer (D., N.Y.) and Mike Lee (R., Utah), designed to spur more foreign investment in the U.S." I don't even know if it passed - there was a lot of concern at the time that it would interfere with the EB5 visa program, which required the same amount of investment but the creation of 10 jobs for American citizens.
Scorecards/Rankings
In 2011, Club for Growth gave him a 100% score. Only four other U.S. Senators received a perfect score: Rand Paul, Ron Johnson, Jim DeMint, and Tom Coburn.[5] He also received a 100% Conservative voting record for 2011 from the American Conservative Union.[6] The Heritage Foundation gave him a 99% score, ranking first only with DeMint.[7] The only wrong vote he made, in the opinion of the Heritage Foundation, was voting for the GSE Bailout Elimination and Taxpayer Protection Act, that would privatize Fannie and Freddy.[8]
However, he received a Liberal Action score of 38%.[9]
Goodlife, you say that "homes are not selling for anywhere close to what people paid back in 2008."
However, according to the US Federal Reserve, their compilation of "Average Sales Price for New Houses Sold" shows that the AVERAGE sales prices for NEW HOUSES SOLD (not houses "for sale," but rather houses "sold") across the entire US is at a new bubble high...
I'm not sure what more objective evidence one can provide than the Fed's own data. I'm not trying to be cute ... but I just do not honestly see where the evidentiary flaw lies in this data presentation.
...uhh you realize this data is only for NEW HOMES (i.e. homes that were just built and are being sold for the first time), which make up a small portion of the housing market.
"Affordable" is the key word. M2 is the total amount of cash in your pocket, your checking account, savings account and money payable to you or outstanding receipts that should come in. M2 is the lowest it has been as a percentage of total currency since 1950. That forebodes a huge drop in purchases. People are withdrawing their savings to buy food, fuel and toys. Food and fuel are easily understood, but toys? Yes, indeed. Hubby says, "Hey look; We can buy that airplane for only $117,000. It's worth $225,000. Let's buy it" and they do. That money is gone from a bank's reserves and does not show up again as M2 because the poor guy who sold his airplane uses it to keep his home from being foreclosed upon. That money goes to Red China where most of the NINJA loan money actually goes.
Red China is spending that money to buy up natural resources all over South America and Africa. They are going to need those resources. For those unfamiliar, NINJA stands for loans that were made to people with No Income, No Job or Assets. There is your bubble. It's smoke and mirrors. When I started in this business, only 15% of mortgages were backed by the government. Now 99% of all home mortgages are backed by the government. No sane bank board of directors would approve most of the loans issued in our country.
The last for sales I have made were cash deals. People are moving out of densely populated areas to rural America. They say they don't want to be where they are now when the EBT cards stop working. I would not even go there unarmed, much less live there. Tick, tick, tick.
I watch housing prices in a couple of different areas........have seen prices in some areas double in the last 12-18 months.
YUPPPP, great post.......another example of USAtard stupidity.
A couple of areas does not an expert make. We are still limping along where we live, one of the income properties in another area is only slightly better and the other property in another area is still just about the same. Plenty of people are still under water here. Can you DM me with the area that's doubled? I'm sitting on a ton of cash right now and it's still a smorgasbord around here. I just need to get off of my lazy duff and do it.
That is not true. Homes are not selling for anywhere close to what people paid back in 2008. Many people are actually paying less than what they would pay in rent. In addition, there are a lot of cash buyers.
No, they are not paying less than they would in rent. You forgot to account for taxes, insurance, maintenance, cleaning, lawn care, repairs, opportunity cost of down payment, opportunity cost of closing costs, opportunity cost (and depreciation!) of appliances and furniture, opportunity cost of added emergency fund, added commute cost (gas, vehicle maintenance and repair, depreciation) due to inability to move closer to place of employment, opportunity cost of time spent on the house and aforementioned commute, etc.
In an efficient market, the beta-adjusted return on housing should be equal to that of equities, and right now, it is much, much lower.
Apparently, if you invest $500k in real estate here, the buyer and his family are entitled to permanent visas, a policy Obama initiated to stimulate our RE market!?
EB-5 visa - Wikipedia, the free encyclopedia
I don't believe that Obama was President in 1990. Of course, GHW Bush was conspiring to make BHO President as they are both members of the New World Order.
I would say that the housing bubble isn't as bad but it is getting there. I think home values have to fall from here. There was an over correction that ended about two years ago and since then there's been a surprising rally in home values. Meanwhile real wages haven't even kept up with inflation.
What we're seeing is a number of factors and reasons for the rebound: 1) Millennials buying their first home and having children, 2) Boomers are finally selling and down-grading their McMansions and 3) Chinese buyers see the USA as a "save haven" for their newly earned riches.
That last point is critical. Most middle-class Chinese see their stock market as nothing more than a slot machine or gamble. Further, their society stresses saving. Indeed, most Chinese who have solid middle-class jobs save ~50% of their income. If they can't invest it in their stock market, what do they do? They buy on American markets and other hard assets. That means homes and material goods. Gold and silver are falling out of favor as Chinese tastes are really fickle and the "follow the herd" mentality means that's why we don't see a gradual decline, but more of a cliff.
It's estimates that here in Seattle about 80% of all home purchases that were all-cash were Chinese buyers. They traditionally bought in Vancouver, BC, NYC, and LA and SF but those markets are overpriced now so they're expanding elsewhere. That's not a shocking number when you remember that they earn about 40% of what we earn now and save significantly more.
But it won't be as bad as the last bubble. Why? Because domestic spending is also up. Millennials are having kids. That means consumables, houses, cars, and other things that go along with it. So the 80+ million Millennials will inject more life into the economy through sheer mass. A housing bubble bursting will cause a little disturbance, but not the "doom and gloom and stock up on ammo and gold and seeds and become a farmer" crowd likes to make you think.
I agree it's not yet quite as bad, but where do you get the idea that Millennials have so much money???
Millennials are already the most debt burdened generation in the history of this country. Good paying jobs are scarce, they have dim prospects for any future wage growth, they have an enormous amount of student loan debt. They arguably have the LOWEST amount of discretionary potential of any generation in history?
How again are they going to buy up all this real estate when they already graduate from college with a non-dischargeable mortgage (student loan)?
The market that I'm most familiar with, southern Arizona, has definitely not recovered to 2008 levels. It's certainly bounced back, though. But hundreds of thousands of mortgages in the Phoenix area are still upside down.
My house in north Phoenix tracks the general market and it went from $225K in 2007 to $110K (Zillow/comps) in 2010, and now is up to $140K (Zillow/comps); apparently the foreclosures are disappearing and we're starting to see a more normal market now. New construction is still in the doldrums. I don't know if I'll ever see my purchase price again, but I'm just holding onto the house as long as I have a good tenant and at this rate it might become worth more than I owe in a couple of years. Rents are going up in Phoenix and it's likely that thousands of other home owners are in a very similar situation to mine, just waiting and wondering when they can sell again.
I hope we're not seeing another bubble; one per decade seems like enough!
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You are WRONG
