-For those Europeans looking for a vacation home, SD is just not convenient. They will buy in Florida, except they already did, and between house prices and the exchange rate, they got royally burned. Which brigs me to the second point:
-Foreign buyers are momentum investors (just like 99% of all real estate investors!). They bought into the Florida bubble when prices were skyrocketing, and we are not likely to see another wave while prices are plunging. Do you know anyone that bought in Panama right after the invasion? Probably not. Yet people flocked to invest there the past two years, when prices were skyrocketing. Same for Abu Dhabi (anyone buy right after 9/11?), same for Baja/Cabo (anyone buy in ’95 when the economy in Mexico tanked?), same for every other “hot” real estate mecca.
-The dollar really hasn’t devalued against Asian currencies. We might see some Asian interest in SD if it does, but there’s two things to remember: 1) Asian investors are the most “momentum” oriented of all (see Macao today); and 2) if our currency really tanks against the Chinese currency, you’ll see Walmart’s prices shoot up, which is not what we need right now to stabilize our economy.
