One thing I don’t think a lot of Americans “get” is the immigrant mindset…
What happens if you get a bad renter? What happens if this or that? The whole immigrant mindset and why it’s different for them is because a lot of these people had a much tougher life where they came from…I grew up wearing Trax shoes from K-mart and hand-me-down clothes looking like a goofball/fob/geek…I didn’t even know it…
A lot of immigrants don’t have the whole “entitlement” mindset so prevalent in American society now of keeping up with the Jones and looking cool.
Growing up, we knew families who were saving well over 50% of their income and buying a house every other year. I don’t think they care if their returns are as high as stocks since they just don’t trust that market.
Also, for real estate, if you buy in a “good” area, I don’t think a lot of these immigrant (Asian) buyers care that much since as in the past, I’m sure all the people who bought in Cupertino, parts of LA are sitting pretty. Also, Asians like to live next to other Asians and get their weekly dose of eating out/dim sum, you name it so they will continue to buy I think.
We’re not talking about Las Vegas, Phoenix or places that people don’t “really” want to end up…but buy in a family area that people want to raise their kids and if you are patient, I don’t think these buyers are the weak hands people think about. This has been true for most prime areas (SD, I don’t think is as prime though as LA/Bay Area).
Again, maybe I’m very biased with what I’ve seen, but nearly every Asian I know had family help buying their house and we’re talking of properties all over a mil in the bay area…
When money is pooled/shared and used to buy real estate, from my experience, it’s strong hands and it’s unlikely the parents of the kids are going to kick them out/be forced to sell. Heck I know of cases in my own close family where this is done already.
I’m sure if you look at property prices in Del Mar, La Jolla, anywhere considered “top”, it has also always been considered “overpriced”…
As mentioned in Rich’s article, it may lag a bit in terms of nominal prices, but I’m not too concerned long term really since there is so much wealth outside of the US and some of these dollars need to leave their original country for safer places to park it.
It’ll go sideways maybe, but again, as I’ve said before, rents are still way too high in a lot of areas so until that goes down, I don’t think foreign buyers with a lot of cash currently getting 1% on their money is going to worry as long as they are making more in rental income.
