Also, I am shocked at how many foreign buyers seem to want to own USA real estate. I dont care what they are paying for taxes in their home countries, they are paying property taxes, HOA’s, Mello Roo’s are a bunch of other taxes and fees on a depreciating asset. Plus with the doller falling so low already, I cant imagine it falling too much more before these international multimillionares feel the pain that comes with it. So basiclly they are gonna plop down a few mill, on a house that is loosing value and projected to loose value, and is in a foreign country that they will only spend a minority of the year in.
I dont dispute that they CANT buy, I am sure they can pick up two or three if they really wanted, but why should they? Rent a suite in Coronado or in La Jolla for a month for what they would pay in property taxes every year and let someone else take the depreciation and maintance costs. Add in a personal maid to clean your house (a hotel does it daily) maintance people to care for the yard, and security to protect the place and this investment is really getting expensive. Plus, the dollar is at all time low’s. Who is to say that in 3-7 years it wont have gone up against some of these other currencies, then where are they? Dont believe me, how many people accuratly thought that the dollar/Euro excange would be 1.5/1 now back in 2000? Not many.
So I guess it comes down to a look at me know factor. There are plenty of people in the world with the resources to pay for all the costs plus the real estate back in 2005, let alone today. If they want to show that they have made it, they can buy and enjoy. Some will. But usually these people have those kinda resources for a reason, and ego boosting isnt usually high on that list of reasons. I just think that the number choosing the ego boost wont be enough to save this market. What I really think is happening/being detected is the leftovers from the party. Some people missed the boat and think this is their second chance to ride the real estate wave. Unless they are looking for a long term retreat (read 10 years+), it isnt. Besides shopping trips to New York are a much bigger and more showy ego boost that doesnt have nearly the overhead costs.
