Who’s buying Houses?

12 Jun

With housing moving as slow as molasses, many families are building their own energy efficient, affordable homes,, in lieu of trying to arm-wrestle a bank for a shot at an affordable foreclosure.

Where I currently reside, there’s a foreclosure on almost every street in town.

While this is happening to our neighborhoods…

… some realtors are sending me “hate mail” telling me that “I need to shut up because housing is doing better than ever”.

So I have to ask;

“Yeah? Who’s buying these homes?”

Nick answered the question for me.

Foreigners Snap Up Properties in the U.S.

BY NICK TIMIRAOS

The six-year slide in U.S. home prices and the dollar’s weakness against some currencies are driving a property-buying binge by Asians, Canadians, Europeans and Latin Americans eager to own a piece of America.

Plowing money into real estate may sound like a risky venture to many Americans. But to growing numbers of foreigners, U.S. housing has never seemed a smarter investment.

International buyers accounted for $82.5 billion, or 8.9%, of the $928 billion spent on residential real estate in the 12-month period that ended in March, according a survey released Monday by the National Association of Realtors…

(Click the headline to read more…)

What do we make of this?

Who was it that said; “There’s a sucker born every minute”?

IMHO – These “investors” are in for hard ride.  US  properties will continue to decline in value.

What’s that? I hear Realtors gnashing their teeth and wailing at my decree…

I say this because sooner or later…

…the fed is going to be forced to end their “near zero percent interest rate policy” – which was enabled to prop up the Wall St capitalists as well as the failed housing sector –  in the next 2 years or LESS.

When this happens, you can expect up to a 20-30 percent price drop in real estate when even fewer “buyers/suckers” will qualify for a mortgage due to the rapidly rising interest rates.

Okay, gotta go now. My “Hate Mail inbox” is filling up… 🙂

 

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3 Responses to “Who’s buying Houses?”

  1. Darryl Whiting June 12, 2012 at 2:29 pm #

    I love receiving your posts it helps confirm my view of the world isn’t so, “Out There”.
    A long long time ago I thought it would be great to leave New Zealand and live in the U.S.A. but the difference in our exchange rate made it impossible, $2 NZ for $1 US. Things have changed; We are now $ for $ and your house prices are extremely attractive about half of what they should or could be. That equates to about 25% of the value they once held. So, I believe Nick Timiraos is right on the money. Keep up the good work and I’ll try to change things over here.

  2. Tex Arcana June 12, 2012 at 4:48 pm #

    Interesting thoughts… Mostly true.

    Down here (DFW, Texas area), we’ve got good movement on used houses, better than nationally. New builds are improving as well–in fact, my wife and I just pulled the trigger on a new build (you’re dead-on on that: they make even non-foreclosed houses tough to get into), we did our due diligence on the builder, so we’re progressing on a build with nice USDA-sponsored financing.

    And yes, I’ve been reading your site for a bit, I love the concept of the container homes, but I can’t quite convince the wife to go that route, not to mention I really don’t want to work quite that hard to build one. Who knows, that might change in the future, so I’ve got this site and the concept in mind, it’ll surface when the time comes. 😉

    Thanks for your site and newsletter, excellent stuff!

  3. clarkscottroger June 15, 2012 at 11:28 am #

    Hey Ronin! I see by your site that you’re still fighting the (good) fight, my compliments on your focus and perseverance.
    On the real estate front, what is the oft-quoted Chinese curse, ‘may you live in interesting times’, I must assume that I must have gotten someone real mad at me in the mid-90s!
    In any event, I am writing this Comment from a conference on distressed properties that I am attending this week and it appears to me that ‘the times’ will continue to get ‘interesting-er’.
    As you probably already know, the pass-through of foreclosed houses (aka REOs) from the banks to the direct markets, seems to be slowing (preferred rumor is that with elections coming up, no one wants to oversupply the market, further driving down values), but Buyer activity (at least in the Northeast) has been quite strong. All of the houses that are priced in the range that First Time Buyers qualify for are in contract, which means a lot of pending sales in our market which, in turn, keeps the demand elevated.
    The interesting trend (at least the one that I have heard most frequently here in the last few days) is a good news/bad news kind of thing.
    Good news: the major players (i.e. banks and Title Servicers) are really trying to streamline the ‘short sale process’ so that it becomes practical for people who are underwater on their mortgage to try and sell the house and find a living place that is more affordable. This is not attributing anything resembling altruistic qualities to the ‘banks’ (Wells Fargo, JP Morgan Chase, Bank of America); it is just that there is huge political pressure that is finally having an effect on these institutions
    Bad news: (disclaimer I am not a financial expert or investment pro…just an experienced real estate broker having been in the business for more years than I care to remember, but…) the word is that the Investor Class, as in Hedge Funds, as in Buyers of hundreds, if not, thousands of properties are smelling money in the ‘distressed property’ segment of the economy. This at a time when the GSE’s are trying to figure out how dispose of a lot of properties and when the banks are looking to clear out their non-performing mortgages and securities and such.
    Can you say, ‘distribution of wealth’?
    Again, I will say that I am not an economist or investor, but I have spent a number of days having companies pitch me on systems and programs meant to find distressed properties for investors to buy. The goal is to buy single family properties to rent for the short-term (5-8 years) and/or buy to dispose of immediately.
    …interesting times, anyone?

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