Tuesday, November 1, 2011

Trends to Watch

I just came back from a meeting of large real estate firms around the country, and there are always interesting ideas that come out of our meetings.  Some of the ideas will be interesting to commercial users and investors as well. 

First of all, I heard that the largest buyer of US mortgages between 2003 and 2008 was the Republic of China.  It's clear that international money has been making its way into the US over the past couple of decades, much of which they got from trading with us in their favor.  What that suggests is that there is a whole new market of buyers out there, and we need to be looking beyond our own borders for them. 

Along the same lines, one of the brokers suggested that we get rid of some of our excess property around the country by selling it --for cash--to non-US citizens, as long as they can prove that they have the cash flow to support it for some period of time.  Once they've bought property, he suggests, they would be eligible for citizenship during a certain window of opportunity.  His idea is that such a proposal would flood us with buyers for short sales and foreclosures, as well as for other property not being absorbed through the normal channels, by granting a carrot to immigrants that will bring wealth with them, while stabilizing our real estate market at the same time.

Other brokers have looked to pools of investors, who are using to cash to buy up real estate they consider to be at bargain rates.  The investors are then holding the properties, and renting them in the meantime.  To encourage even more sales, another firm owner suggested that the rules be loosened on the use of IRAs for the purchase of real estate, and that many more homes would sell as a result.  His theory is that IRAs are for retirement, which is what most people consider their homes to be for as well.

All of these ideas, some of which are more likely to come to fruition than others, are aimed at encouraging us to look beyond the current malaise for trends and future cash flow streams which will increase sales and raise the value of properties.  And anything that does that sounds good from here!

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