Selling Poinciana One Property at a Time.: American Made. Foreign Owned!

American Made. Foreign Owned!

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Hi folks. This article is my opinion based on what I see happening in my market area. Home ownership is declining in America. Past property owners have and are going through foreclosures and short sales and are no longer in a position to buy. Real Estate values are still declining in most of the major markets. Finally, real estate is affordable again. But who's buying? In my market, Central Florida, the answer is.....Foreign Investors.

Investors from the UK, Canada and other countries are taking advantage of the weak dollar and low property values and are scooping up properties that Americans can no longer buy due to credit issues. Then of course these Investors turn right around and rent these properties back to us.

Now being that I am a Real Estate Broker and make my living by selling Real Estate this has been a real boom for my business. BUT.......what affect will this have on our economy over the long run? Are we becoming a nation of renters? Is the money we are paying towards rent now leaving the country instead of being put back into domestic circulation? What say you?

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***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.

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Comment balloon 38 commentsBryant Tutas • February 07 2011 11:44AM

Comments

I'm not sure I'm in a position to comment on this, being Canadian and all.  But I can say that if it was happening in my country, and if the banks were a big part of the reason why this whole debacle started and a big part of the reason why only foreign investors have the credit to be homeowners here, I'd be absolutely livid.  Maybe "incensed" is more the word?

Posted by Tanya Nouwens, Montreal Real Estate Broker & Stager (RE/MAX ROYAL (JORDAN) INC. / Tanya Nouwens Inc. www.readysetsold.ca) over 8 years ago

Bryan, we're not seeing a lot of this in the DC area.  Although there are many buyers in the international community, they seem to be buying homes as residences.  I think that Florida has to get to the point very soone where it's an attractive investment for US citizens.  It should be now - the prices there are low enough to attract cash buyers!

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 8 years ago

I've been saying/thinking for quite awhile that this housing debacle will be with Americans for a long time and totally change real estate and our economy as we have known it.  What with all the foreclosed folks not being able to purchase for numerous years and the problem of many who now can't get passed the loan requirements.  Where in the world did the thinking come from that thought it would be great to offer loans with nothing down!

Whose left -- generally speaking investors and many from foreign countries.  What galls me is that I feel we're in this unbelievable mess due to politics, big business and all of us citizens who were busy working and taking care of our lives and not paying attention to what was happening.

I sure hope there is still time to turn this country back around and get folks back to work and stop all the excessive spending.  I use a credit card but I pay it off every month.  I'll be 70 this year and that's how I grew up.  You didn't buy stuff unless you had the cash to pay for it.  The country is drowning in debt.  Just some of my opinion and obviously I have strong feelings about it.  Sorry for the rant.

Sue of Robin and Sue 

Posted by Robin Dampier REALTOR®, Hendersonville & Western NC Real Estate Source (Coldwell Banker King) over 8 years ago

BB,

I just moved to an office where I am now working with investors who buy homes for anywhere from 30 to 70 cents on the dollar.  Nope, in this case, they're not foreign.  That being said, can the average Joe compete, I say Nope! 

Also, there is much talk recently of the tax write-off for owning your own home going away.  When that happens, there will literally be no advantage to owning instead of renting.  What's your opinion on this? 

 

 

Posted by Linda K. Mayer, Realtor, SRES, SoCAL, A REALTOR YOU CAN TRUST (License # 01767321) over 8 years ago

I think that there will certainly be parts of the US that will have a disproportionate amount of renters. Or rather, maybe we are returning to an acceptable level and had an overabundance of homeowners.

Posted by Melissa Zavala, Broker, Escondido Real Estate, San Diego County (Broadpoint Properties) over 8 years ago

BB,

Keep selling.  Those sales drive the wheels of commerce and pay real estate taxes.

 

I don't think it's a bad idea to invest in the best.

Posted by Coldwell Banker Camelot Realty, Homes for Sale Mount Dora Realtor (Coldwell Banker Camelot Realty) over 8 years ago

BB, I have seen this going on for a long time. Not sure if it is such a bad thing, it at least keeps the wheels turning, both for us and the industry... In other countries there are occupancy and residency laws for property purchases.... Due to this being a big problem, we are not quite there yet.

Posted by Terkel Sørensen, Realtor, 951.805.0773 , Bank owned and Short Sales (Real Estate Places) over 8 years ago

This is all because of the monetary policy of the fed and how the flow of money works on a global scale.  As long as the dollar is being poured into the global economy, we'll continue to see this.  It happened in the 80s when Japan bought tons of real estate over here and it's happening now with buyers from Europe and Asia.  However, as the Euro is in trouble, China is trying to slow down their economy, and our dollar becomes slowly less appealing (assuming interest rates move up again) we'll see less foreign investment.

Posted by Bryan Robertson over 8 years ago

These homes were already owned by foreign investors that bought the mortgage paper. Makes no difference who buys at retail.

Posted by Robert Slick, NRBA, RDCPro, Trident/CCAR MLS (Beach and River Homes) over 8 years ago

Bryant, to me, part of the 'American Dream' is the opportunity to own your own home. The fact that some people choose to rent rather than buy has never made sense to me but I respect their choice. Right now, it is still a choice for many. I would not like to see the choice taken away.

Posted by Maria Morton, Kansas City Real Estate 816-560-3758 (Chartwell Kansas City Realty) over 8 years ago

Should not have no bearing who is buying the homes. . at least someone is buying them . . and that on itself is preserving the "American Dream"

The nightmare would be . . no one wanting to buy. . .

Posted by Fernando Herboso - Broker for Maxus Realty Group, 301-246-0001 Serving Maryland, DC and Northern VA (Maxus Realty Group - Broker 301-246-0001) over 8 years ago

Florida is heaven to the pale skins from Ireland and England, they worship the sun. I would say they'll all become permanent residents there when they retire!! Fish and Chips anyone?

Posted by David O'Doherty, Clayton NC Homes, Raleigh, NC (Raleigh Realty Inc) over 8 years ago

It's amazing how it all comes down to the value of the dollar. Until we have a system of sound money, we'll eventually become a nation of serfs.  It all starts at the Federal Reserve. 

My favorite quote by Jefferson:

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

Just remember, the Federal Reserve is as federal as Federal Express.

Posted by Tim Maitski, Truth, Excellence and a Good Deal (Atlanta Communities Real Estate Brokerage) over 8 years ago

Someone has to buy these homes and with America bankrupt right now (did I say that?) it does not surprise me that foreign investors are snatching up properties.

Posted by Dan Quinn, Dan Quinn (The Eric Steart Group of Long & Foster Real Estate) over 8 years ago

Bryant, I think foreign ownership varies by location.  You're in a pretty high demand vacation destination and may see much more of it than we do in our little sleepy area.  We have foreign buyers, but they are end users and not investors.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 8 years ago

Let's make sure this is not an excuse for rampant jingoism.  Foreign investment in our country will make us stronger, not weaker!

Posted by Richard Strahm, Lansdale and North Penn Real Estate (American Foursquare Realty) over 8 years ago

Bryant - Our main industry in Central Florida is tourism and I hope foreign investment will continue because we need it.  I don't think it will have an adverse affect on our economy as it will help stimulate it by bringing in foreign investors. "it gets worse before it gets better."

In your area, especially, short term rental would be the way to go, but investors have to be smart about their rental rates and who they hire to manage their properties. A nation of renters, I don't think so not in long term.  I think it will rebound and we will recover, the question is "when"?  

Posted by Petra Norris, Realtor, Lakeland FL Homes for Sale (Lakeland Real Estate Group, Inc.) over 8 years ago

Houston is an international city and we thrive on the international money spent/invested in our city. I guess I don't understand the alternative ... are you saying it would be better for the properties to fall into disrepair and remain abandoned vs. a foreign investor maintaining the property? 

Posted by Judith Sinnard, The SMARTePLAN Lady (SMARTePLANS; Houston, Texas) over 8 years ago

BB, foreign investors have been around for a long time. As Judith (#18) stated, Houston is a good example. The rental income may not be going back into our economy, but at least their purchasing power has a positive impact.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA over 8 years ago

Bryant - I agree with Tim #13. That is one of my favorite quotes ever by Thomas Jefferson. This should be printed out and taught in every home, in every school, etc. I won't even get started because it would take a post to respond:) 

Posted by Katerina Gasset, Get It Done For Me Virtual Services (Get It Done For Me Virtual Services ) over 8 years ago

Bryant,

I don't see a problem at all. There are folks who are disciplined with money. There are folks who live paycheck to paycheck. Its what makes the world go around. In the larger scheme of things, I believe this to be a non-issue.

-Brent

Posted by Brent & Deb Wells, Prosper TX (LivingWell Properties) over 8 years ago

Tim Maitski (#13) is right on.  The problem is the Federal Reserve and fractional reserve banking that have destroyed currencies around the world.

Posted by Bob Willis, Orange County & L.A. County Real Estate Agent (Berkshire Hathaway HomeServices California Properties) over 8 years ago

This sort of thing is cyclical, just like recessions and stock markets.  The strong come out on top and the weak are either eliminated, bought out, chopped up or go home to lick their wounds and then come back out fighting again.

Although we are a nation of debtors and spenders, the fact that the homes are being purchased means property tax revenue, closing fees, title/hazard insurance, repairs, remodeling, inspections, maintenance and more on the local level.  I wouldn't worry too much about it.  It's still pretty good for our economy.  I for one, love renters.  They are subsidizing my early retirement and hopefully doing the same for you too.

Posted by Anthony Daniels, SF Bay Area REO Specialist (Coldwell Banker) over 8 years ago

We have a very diverse population here in new York so I don't see things outside of my market to gauge trends. My gut sense is that today's foreigners are tomorrows Americans. We are a nation of immigrants, and that's how it has always been. 

Posted by J. Philip Faranda, Broker-Owner (J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY) over 8 years ago

I like Robert Slick's point in comment #9. I know there is a lot of foreign backing propping up the mortgage market, so why not encourage foreign investment on the retail side as well. If the rental income makes it's way back into our banking system or not is irrelevant. What really matters is the homes get sold and our housing market continues to stabilize. JMTC! Thanks for bringing this up for discussion Bryant.

Posted by Steven Graham, Coach, ePs, Director of Training (epropertysites) over 8 years ago

Wow -- with pretty much everything leaving this county and so few things are "made in america". Its odd to hear about flow in our direction. My concern is what kind of landlord are these absentee owners? Do they hire established management companies? Possibly creating jobs? Do they take care of the properties or are they creating slums? 

Posted by Jennifer Marks (On Maternity Leave) over 8 years ago

I'm not really seeing a whole lot of this in the DC/Northern Virginia area. There isn't too much to complain about at the moment.

Posted by Aaron Seekford, Ranked Top 1% Nationwide 703-836-6116 (Arlington Realty, Inc.) over 8 years ago

We're also moving into a time where the next generation(s) doesn't care about home ownership. They like the mobility that renting provides. It's a trend that may not be going away, as they like mobility in many of their lifestyle choices, including their careers! Great topic!

Posted by Chris and Berna Sloan, Tooele UT (Group 1 Real Estate) over 8 years ago

Bryant, great target audience to think about, the UK and Canadian buyer. Thanks for the heads up.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) over 8 years ago

There's alot of foreign investors buying prime real estate in California!!!

Posted by Gerard Ladalardo (Black Ops Outfitters) over 8 years ago

I've recently started really THINKING about it.  I guess one commercial too many that hit home with the one that had the CHINESE teaching a class about the fall of AMERICA.  Nothing personal against any nationality at all but I'd rather the US be doing better than anyone else (I'd think that sense of nationalism would apply in any country!).  It's one of the reasons that I'm trying to stop shopping at WAL MART as I see everything I buy is made somewhere else...and the thought of my dollars going somewhere that actually wants to do the USA harm, makes me shudder.  Yeah, it costs a bit more lately but I'm trying to stay out of Wal Mart and foreign made imports...Never thought about it affecting the home ownership in the USA as well, so thanks for the insight.

Posted by Ron Tarvin, Broker, Katy, Houston, Cypress 77450,77494,77095 (Residential, Investment properties, rehab projects, property management, luxury homes, new construction!) over 8 years ago

Overall homeownership has only fallen by a couple percentage points nationwide.  It was pushed too high to begin with from all the easy flowing money a few years back at the peak.  As many others have said, it's a good thing somebody is willing to buy and help stablize the market.

Posted by Mitch Gover (BidOnRealty.com) over 8 years ago

I haven't personally seen so much foreign investors buying properties in my market, but that doesn't mean it's not happening.  I've seen individual investors have a difficult time getting approved for the 5th mortgage, a point where qualifying gets more difficult.  I should think there will be less qualified buyers as time goes on.

Posted by Pamela Seley, Residential Real Estate Agent serving SW RivCo CA (West Coast Realty Division) over 8 years ago

totally off topic, but i just posted your redneck counteroffer on my facebook page:)  you and tlw have way too much fun:)

Posted by Courtney Cooper, 206-850-8841 (Ben Kinney Brokerages Leadership at our Keller Williams North Seattle Office) over 8 years ago

Bryant, I am seeing the same thing in my neck of the woods. It is scare to think what the long term affect to our economy will be in 20 or 30 years.

Posted by Les & Sarah Oswald, Broker, Realtor and Investor (Realty One Group) over 8 years ago

My foreign buyers in Florida - NC, New Hampshire and Texas! At least they are not all Canadians!

Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) over 8 years ago

Eventually, things will change and the American renters will become buyers again.  But you're right, the monies from the rentals don't all stay here.  Interesting observation, Bryant.

Posted by Wendy Rulnick, "It's Wendy... It's Sold!" (Rulnick Realty, Inc.) over 8 years ago

Unfortunately foreign investors buying American property has been occuring for quite some time. For instance the purchase of the Chrysler Building in NYC. 

Courting foreign investors as an alternative to them investing in Wall Street has been occuring with greater frequency as the US economy weakens, and the dollar loses value against other currencies it makes America an attractive investment. Not just in Florida, but in New York, Nevada, and California as well.

Posted by Allison Stewart, St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904 (St.Cloud Homes ) over 8 years ago

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