[LewLew]

Originally Posted by V1-P

LewLew said, "the lack of qualified buying pool here in our own country"

I disagree. It is not so much as a lack of qualified buyers in my opinion, and proof of this is a great value will sell. The problem is devaluing the dollar to promote globalization (a surrender of our national sovereignty) and a debtor mentality Americans have.

Our parents worked years to get their home, assets and luxuries. Baby Boomers grew up wanting what their parents have without working for it as long or paying for it now - just charge it - mentality. When economic conditions fluctuate people have so much debt they can't fluctuate back. Many thought, just file bankruptcy, that's why they changed the bankruptcy laws. As for the "wealthy" , I would love to see their P&L statement and Financial Statement to look at Assets / Liabilities and what their debt totals.

I was referring to the pool of qualified buyers that will be no longer once they all lose their homes. For example...right now let's say there are 1M qualified buyers (I am making up round numbers here) in this country. When the foreclosures peak next year, and all go to bank owned...in 2009 there may only be 700,000 qualified buyers. Normally, in a stable economy, the number of qualified buyers slightly increases each year (1/2-1%), but in this case, our numbers are going to plunge down. So, there will be a surplus of inventory (even more than today), but there will not be the consumer population there is even today to purchase. I guess I wasn't clear.

[sunrico90]

I believe that they will look for housing on the $500K and above (truly), this might bail out some families that are desperate. But will the international diversity in the state grow?


Positive or negative


What about the commercial zone, will businesses be next on the list?

[Hero]

MOD deleted

Rich Chinese (or Europeans, or Arabs) are driving up housing prices.
FALSE. The percentage of US houses bought by rich foreigners is tiny. Furthermore, American housing is clearly a bad investment at this point. Foreigners can just wait and watch both the dollar and American housing continue to fall, and then buy for much less in a few years. Rich foreign investors are not dumb enough to buy into a badly overpriced market, but your broker is hoping that you are.

[rich renter]

florida homes have been always cheaply priced compared to foreign countries, some of them bought, but not a huge amount why is it going to change now when the property they buy will be worth less in a couple of years

[V1-P]

OK LewLew, point taken, thanks for the correction. Throughout history, there has always been a percentage of foreclosures. Spikes in the market make them more pronounced at certain times.

Sunrico90 hit the nail on the head, in my opinion, when he mentioned international diversity.

Consider this: In the 50's & 60's the largest population was whom?
Baby Boomers, yep. So Gerber, Mattel, Buster Brown all made millions. Then these boomers grow up and guess what they need? Yep, guessed it again - a house. So the real estate market boomed. Where are these boomers today - financially? Most are pretty well set with 401 Ks, IRA's, real estate investments, etc. Question - what age group are these foreclosures affecting most? Baby boomers? I think not.

As the baby boomer's family grew, they bought larger homes. Now the kids grow up and are gone off on their own. Mom & Dad's retirement includes selling that big house and downsizing. So what happens? You get a flood of properties from baby boomers selling plus you get foreclosures from over-extended younger people and now the housing inventory available soars.

I am not saying all foreclosures are from younger people and all baby boomers are financially set. But if you were to look at percentages, you would see the trend.

Next question - what will the largest segment of Americans buy next? Retirement homes? Some will. Longterm health care, security and beauty products to slow down the aging process because they hate what getting old looks like on them. By zeroing in on what baby boomers will buy next is where the next "Big Thing" will come.

That's why Sunrico90 hit it - When we have an abundance of houses in inventory and no one to fill ALL - International growth (illegal and legal immigration) will fill the inventory.

[Magnulus]

There's a far simpler explanation than trying to blame baby boomers: Alan Greenspan lowered interest rates too much. Coupled with lax oversight by the government over the home lending and securitization industries, alot of people got sucked into homes they couldn't afford to pay for. However, many intended the homes they bought to be quick investments (flipping). The problem was eventually home prices outpaced the local wages, so the only people who were left buying houses were speculators. Eventually people realized that the speculators were just trading houses at over-inflated values (nobody really wanted to live there), inflation was increasing, and Alan Greenspan started raising interest rates, and this caused the collapse as it was now less profitable to speculate in housing. This spread to financial markets that deal in the securitizations and hedge funds.

[V1-P]

I never blamed the baby boomers. The question was about a buyers market for international folks. If you read the thread on the housing bubble on this forum, you'll clearly see Greenspan is not the problem. Nor is government over sight, that's communism. Prices and wages didn't do it either. Just read the other thread.

[Hero]

Originally Posted by V1-P

Consider this: In the 50's & 60's the largest population was whom?
Baby Boomers, yep. So Gerber, Mattel, Buster Brown all made millions. Then these boomers grow up and guess what they need? Yep, guessed it again - a house. So the real estate market boomed. Where are these boomers today - financially? Most are pretty well set with 401 Ks, IRA's, real estate investments, etc. Question - what age group are these foreclosures affecting most? Baby boomers? I think not.

As the baby boomer's family grew, they bought larger homes. Now the kids grow up and are gone off on their own. Mom & Dad's retirement includes selling that big house and downsizing. So what happens? You get a flood of properties from baby boomers selling plus you get foreclosures from over-extended younger people and now the housing inventory available soars.

Just to add, the majority of baby boomers are not as well off as they should be. Boomers have a 2.3 to 1 ratio of wealth to earnings on average. Something like 1/3 of boomers have no savings with all their equity in their homes.

Here is a list from the issue of money that says what people should have saved for retirement at various ages in relation to their income:

Age 45 -- Should have saved 4.1 times current income
Age 50 -- Should have saved 6.1 times current income
Age 55 -- Should have saved 8.5 times current income
Age 60 -- Should have saved 11.4 times current income
Age 65 -- Should have saved 15.0 times current income

Based on numbers alone, it looks like many boomers will eventually have to sell their homes.

[V1-P]

Good point hero.
At least they have their home to sell. Another thought is the kids moving back home with their parents.
The international buyers find deals because the Euro is worth more than the dollar by almost 1/2. One trend I have seen though, Europeans have more tax deed certificates and tax deed sales than before. I don't know if this is because they don't understand that process or not.

[lostbuyer]

the europeans are coming to save the day,after the holidays,so ive been told by a couple of construccion companies.They are gonna come here and build (and im not making this up)3thousand houses for wealthy europeans,in various cities throughout beautiful polk county.I literally lmao when I heard this,but you know what was even more funny??when I heard it for the 2nd 3rd time...apparently they read it in the newspaper...maybe the national enquirer.has anyone eslse come across this argument..or did I just dream all of this,cause it really is hard to believe...