[quote=CA renter]
Some are foreign investors who think the dollar is safer than their own currency and/or want to move money out of their own country for various reasons. Others are investors/managers/funds who are managing pooled investments from a variety of people and/or institutions. There are a lot of mega-millionaires and billionaires out there on a global level. That money goes wherever it’s perceived to be the safest and where it’s likely to yield the best returns. Whether it’s true or not, many people seem to think that the United States — and the USD — will give them the best return for the lowest possible risk.
[/quote]
I don’t see it this way. Among all assets real estate is the most non-liquid asset. In a crunch one can not get out of it fast enough. For a foreign investor to purchase real estate in the US, especially single family homes (think that is what we are talking about) they need to have specific needs. Needs like the investor spends a significant amount of time in the US, or has an immediate family member who will. If the situation were reversed, would you spend your money in a foreign country buying residential property just because it is considered a safe investment?
As a foreign investor if my objective was to take dollar as a safe harbor, then I would consider large apartment buildings and hotel chains as better investment opportunities. Definitely not single family residences.
The other option for foreign investors seeking safe currencies are Treasury bills, or US based stocks. Just like a US based investor can diversify using a multitude of stocks and bonds depending on global economy trends.
[quote=CA renter]
I’ve mentioned a deep-pocketed investor who was looking for large blocks of REOs, but who was not well-connected here. That was all Chinese money, and they had ~$2 billion at their disposal. I’ve heard that there are Russians doing the same thing, especially on the east coast. And there are a fair number of investors from Latin America, too. Of course, we have our own wealthy folks who are desperately looking for a place to earn a yield, too.[/quote]
IMO there are better alternatives for these wealthy folks seeking yield to consider, than dealing with the hassles of managing residential properties.
