- 1 There used to be a time where buying a home in the United States represented a fulfilment of a long time goal.
- 2 One would think that with the real estate prices at an all-time high since its drastic fall in the wake of the global financial crisis in 2008 and the strong U.S. dollar that there would be less foreign buying of real estate.
- 3 Then there’s the red tide known as China.
- 4 Americans are not foreign to the notion of foreigners coming in and buying property.
There used to be a time where buying a home in the United States represented a fulfilment of a long time goal.
It meant that you made it, that you achieved a part of the American dream. Although those sentiments still stand today, it is overshadowed by the hordes of foreigners looking to get in on the action. Understandably, there are mixed reactions over this. On one hand, developers and realtors are enjoying the boom in business, with some even building and developing property specifically for the foreign clientele set. However, there are some American residents who feel that their communities are being diluted and that foreign investors are artificially inflating the market. While the middle ground has yet to be found, the first question that should be asked is why are they buying all this property now?
One would think that with the real estate prices at an all-time high since its drastic fall in the wake of the global financial crisis in 2008 and the strong U.S. dollar that there would be less foreign buying of real estate.
In a way this is true, on paper the buying did slow down… a little. But, upon closer review it seems that investors merely shifted their interest from high end homes to cheaper residential and commercial properties. But why now?
The economic and political turmoil occurring throughout Europe and much of the world is making people very hesitant in keeping their money in their own countries. Take Greece for example, not too long ago there was restrictions on how much cash could be withdrawn on a daily basis. The couple of weeks-old Brexit is causing great amounts of tension between the UK and Europe.
Then there’s the red tide known as China.
A country of over a billion people, a burgeoning economy and much of the world relies on its manufacturing prowess, has been the epicenter of great economic growing pains.
Citizens of these countries that have money are worried about the security of their wealth should they leave it in their home countries. So they have instead decided to make an investment of sorts, to put it into real estate outside of the confines of their nations borders. They look to American shores to set up shop, to invest in homes and park their money in a relatively stable economy.
Americans are not foreign to the notion of foreigners coming in and buying property.
For decades their northern neighbors, Canadians, have purchased property down south, led by “Snow geese” (wintering retirees) to escape the cold winters. However, these days American communities are also being faced with a steady stream of Chinese, Russian and South American buyers. And, these are not retirees either and are usually wealthy individuals looking for a haven for their cash.
It is uncertain how this will affect home prices and the fabric of American communities in the long run, but the reality is that it is happening right now and nothing is really being done to stem the tide.