Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Can someone help me understand why a lot of people think that immigrants drive up the price of housing to the point where the current residents cannot afford to purchase a house?
First, my use of the word "immigrants" has nothing to do with the movement of people from outside the country into another. I'm referring to state-to-state migration.
So, let's say that I retire and want to move from my awful state that has a "bad reputation". I won't be working, so jobs and schools are not a consideration. I may be escaping high taxes, high crime, lousy weather, high cost-of-living, whatever. Let's just say that I just want to move to a different area because the only reason I'm in my current location is because of my job and I want adventure and to experience a new place in my golden years.
So, I see a house that is advertised at some asking price. I assume the seller obtained input from a realtor to set the price of their house. If I like the house, and am willing to give the seller the asking price . . . how is that driving the market up beyond the reach of local residents?
Is it a supply-and-demand thing? Or is the market so hot in that specific area where there are multiple buyers bidding for the same house? I suspect not the latter because some of the houses I've been looking at have been on the market for months, even close to half a year.
Or, is it just local bias because the people who complain do not have sufficient income to purchase a home in their city and want to blame someone, so they blame outsiders who come in with money and seem to snap up available properties at will?
---
Thanks for helping me understand. I'll be leaving one state and moving to another, and don't want to be a "bad neighbor".
You should probably use the word "transplant" instead of "immigrant" if that's what you really mean.
Yes, it's a supply and demand thing. Often if transplants are moving to an area, it's because of a company moving or opening a new facility. So you have lots of people moving in at the same time, looking at the same houses, who need to move by the same deadline.
Also, long-time residents may get used to neighborhood prices being near a certain level and find that they could not afford to move back into their own neighborhood if it has seen a lot of transplant activity because of the circumstances in the previous paragraph.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,585 posts, read 81,206,701 times
Reputation: 57822
Our area is a good example. Home prices are back to what they were before the crash, with most in the last year selling for over asking price the first day or two on the market. Some, but not a majority, are people from other countries such as India with cash, who have come here to work in high tech jobs, and need a home large enough for 3 generations to live in. Most are sold to people coming from other states for the same high tech jobs that need a mortgage but have no contingency and a high income. One down the street sold in 1 day for $720k, asking was $669k. That seems to have slowed a little in the last month or two but it's supply and demand. Good schools, decent commute, and low crime make it a highly desirable place for bot immigrants and transplants, but often out of the reach of locals that want to move up.
Or, is it just local bias because the people who complain do not have sufficient income to purchase a home in their city and want to blame someone, so they blame outsiders who come in with money and seem to snap up available properties at will?
I think mostly this. People have a tendency to relocate from more expensive areas to less expensive ones - particularly at retirement time. They sell a house in their expensive old location and often make a large profit if they bought it decades ago. So they are flush with cash and feel like the things in the new location are a bargain, even if they are high price by those local standards. The local people are often priced out of the market because they don't have the benefit of years worth of equity and value appreciation in a market that has higher property values to start with.
I think mostly this. People have a tendency to relocate from more expensive areas to less expensive ones - particularly at retirement time. They sell a house in their expensive old location and often make a large profit if they bought it decades ago. So they are flush with cash and feel like the things in the new location are a bargain, even if they are high price by those local standards. The local people are often priced out of the market because they don't have the benefit of years worth of equity and value appreciation in a market that has higher property values to start with.
^This
Take Idaho as an example. Real estate prices there are a bargain compared to California. There has been a reasonable amount of migration from California to Idaho, particularly by retirees. Many of them cash out of their expensive California real estate and buy homes in Idaho at prices that seem like a bargain to them, but that are above what people working in the local economy can afford.
Thanks for the replies. I guess as a geographer, I used "immigrant" because it was the most appropriate geographic term.
I have a better idea now. I'll be "emigrating" from my high cost-of-living state with forty years of hard-earned equity and "immigrating" to a lower cost-of-living state where hopefully I can purchase a house without having a mortgage. Need to. Income will be a lot less after throwing away the alarm clock.
Our area is a good example. Home prices are back to what they were before the crash, with most in the last year selling for over asking price the first day or two on the market. Some, but not a majority, are people from other countries such as India with cash, who have come here to work in high tech jobs, and need a home large enough for 3 generations to live in. Most are sold to people coming from other states for the same high tech jobs that need a mortgage but have no contingency and a high income. One down the street sold in 1 day for $720k, asking was $669k. That seems to have slowed a little in the last month or two but it's supply and demand. Good schools, decent commute, and low crime make it a highly desirable place for bot immigrants and transplants, but often out of the reach of locals that want to move up.
If people are really paying over asking price, I fear we have learned nothing from the past crash. Don't the houses have to appraise? Are those shady practices going on again?
I wonder what you mean by "high" income...because to purchase a $720,000 mortgaged home, I am assuming these people must all earn upwards of $300,000 a yr. If so, it makes sense how the average, local person can't compete or buy a home there.
You can make under $200k and qualify for a $700k house, you don't need $300k... though $200k is still a lot of money. Also, most people in this higher price point put more of a downpayment down so income can actually be lower.
From what I see, with tons of CA people moving to TX, our prices are significantly lower than CA. People come here saying, "What??!! I can buy 3000 sqft for under $400k? Are you kidding me??" And even if a house is worth $400k, but priced at $450k, that CA buyer will pay the price because they can, and it's still "cheap" to them.
We do get the flip side as well, "I hear TX is cheap so I want 3000 sqft, brand new with a media room and gameroom for under $150k." Nope, not gonna happen, and then they get all mad. Sorry, I don't set the prices...
I see that you are a realtor. I understand that you don't set the prices, but don't you have a huge input into what price a seller will list their house? If they say they want to sell their house at $250,000 when similar houses are selling for $180,000, (hypothetical figures), wouldn't you say to them that they are overpricing their house and it will not sell, or if it will, it will take a very, very long time?
I'll be leaving one state and moving to another, and don't want to be a "bad neighbor".
In my experience, being a bad neighbor as an "immigrant" has more to do with your attitude toward your new place than anything else.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
