[quote=Fearful]
I was bemused by the Canadians rationalizing buying U.S. real estate because “if the Loonie falls, the value of this real estate [relative to me] will go up.”
What if the Loonie continues to rise and U.S. real estate continues to fall? What then, Mr. Canadian, sir?
[/quote]
Speaking as a Canadian in exactly this situation I think I’ll do what I moved here to do – continue enjoying the weather. I wouldn’t recommend moving across a continent to a new country as an investment strategy – its a remarkable amount of work and aggravation.
[quote=masayako]No foreign buyers = less demand
Less demand = lower the Housing price
So, I am saying the exchange rate and currency is killing us local buyers because it kills our purchasing power.
The foreigners are here to make profits for themselves, not here to save our economy. When the price go back up, they will sell their houses back to us at a higher price to make money for themselves. Got it?[/quote]
So I think you are saying that without foreign buyers like me the local sellers would have had to sell for even less? Hmm. That would have been so much better for the economy.
And no, I’m not here to save the economy, though I do pay taxes (quite likely more than I did in Canada), and I did buy cars, furniture, insurance, health insurance, and directly create a few jobs. I guess it would have been better if I stayed home.
[quote=sdrealtor]
Is it possible they are buying here to enjoy what we have to offer? Contrary to popular belief around here this is still the greatest country on the planet.
[/quote]
Yes, quite possible. At risk of getting chased out back to Canada I’m going to go out on a limb and declare this a GREAT country – I’ve only lived in two, so I don’t think I’m in a position to declare it the GREATEST. 🙂
[quote=ucodegen]
Did anyone ask:
Who is financing these Canadian purchases? Canadian banks restrict the amount of leverage, but US banks are more ‘generous’ on their leverage.
If the properties are being purchased by Canadians, using US Banks, we could be looking at R.E. collapse #2. Foreigners have a greater incentive to just walk away if the deal goes bad, particularly if they are highly leveraged. Now who makes the US Banks whole? Will they be expecting bailout #n+1?
[/quote]
I’d suggest that most Canadians are probably buying cash, or borrowing from Canadian banks. From what I can see US Banks will barely lend money to Americans these days. We weren’t able to get a mortgage, even with 60%++ down.
Now, if a bank would have been dumb enough to let a foreigner take out a 95% mortgage then I don’t see why that foreigner should get judged any differently for walking away than a local.
There are more people in California than all of Canada, so I think I can say with confidence than things would have to be pretty bad for a few defaulting canadians to push you over the brink.
[quote=masayako]
Imagine an extreme scenario, let’s say a foreign RE investment group buy all the rental apartment complex near SDSU, and then raise rent by 20%. We would have a rental shortage near SDSU instantly and local students would need to pay more to be able to live near the school and have less money to spend on other items.[/quote]
Umm, if the market near SDSU would bear a 20% rate increase, why isn’t the current landlord doing that? What does this have to do with foreign investors?
[quote=masayako]
Just look at Vancouver, people from Hong Kong ‘invest’ in it and now they are the biggest landlord in Vancouver. What happened next? Housing price tripled. Local buyers forced to move out from the good neighborhoods in Vancouver to somewhere remote.
[/quote]
I don’t know Vancouver well – and honestly, even Canadian press seems to think its in a huge bubble. That said its also probably the nicest place in Canada to live (mountains, ocean, fairly temperate…. like san diego but lots more rain!) but Toronto is an amazing multicultural city and never once have I heard anyone curse all the foreigners. They are a big part of what makes Toronto .. well, Toronto.
We love San Diego – we’re coming up on the end of our first year here and have made lots of great friends. Our kids love their schools, the weather is great, and people love to come visit. I like to think we’ve been a positive addition to the area.
(also worth noting that I think our house was forsale for 2 years before we bought it … so I don’t think there’s an argument that we stole it away from some local buyer!)
