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yausta
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Registered: ‎02-07-2013
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"I WOULD HOLD BACK ON HOME PURCHASES FOR A LITTLE WHILE"

[ Edited ]

As most of you probably know, home values have been skyrocketing within the last few month.  As a matter of fact, even within a few days do you see values go up tremendously, which is too good to be true.  Well, here's the deal, there is word from a Chinese news article that China will start investigating the large amounts of money being poured into the purchase of homes in the US.  If this is able to deter most of the Chinese from taking away all our homes in America, I'm sure property values will normalize based on our current economic situation, which will be no where near what the value is currently due to the sudden spike.  So before you decide to compete against an all cash buyer, keep this in mind, you will lose.  You don't want to lose money during a economic recovery.  Good luck!      

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sheriff
Posts: 2,346
Registered: ‎06-01-2012
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Re: "I WOULD HOLD BACK ON HOME PURCHASES FOR A LITTLE WHILE"


yausta wrote:

  If this is able to deter most of the Chinese from taking away all our homes in America     


Foreign investors, whether they are from Russia, China, or India do not "take away our homes", they sometimes buy them, with the idea of renting them out or having a place to live when they move here.  I would be interested in seeing the exact article you are referring to, rather than a "I heard it from someone type of thing."  You can provide a link, even if it is chinese and we can translate it on yahoo or google.

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bahomeloaner
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Registered: ‎05-15-2012
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Re: "I WOULD HOLD BACK ON HOME PURCHASES FOR A LITTLE WHILE"

The question is - how long? What in case things don't pan out the way you anticipate. Assume that Chinese stop buying properties but people from Hong Kong do. What will you do?

 

I suggest you to be firm in whatever you decide. You either join the crowd or wait for the next crash which could take 10 years to arrive.

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lexa
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Registered: ‎05-13-2009
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Re: "I WOULD HOLD BACK ON HOME PURCHASES FOR A LITTLE WHILE"


bahomeloaner wrote:

I suggest you to be firm in whatever you decide. You either join the crowd or wait for the next crash which could take 10 years to arrive.


1st one arrived in 5.

once mortage rate rise 2%, game's over.

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sheriff
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Re: "I WOULD HOLD BACK ON HOME PURCHASES FOR A LITTLE WHILE"


lexa wrote:

bahomeloaner wrote:

I suggest you to be firm in whatever you decide. You either join the crowd or wait for the next crash which could take 10 years to arrive.


1st one arrived in 5.

once mortage rate rise 2%, game's over.


Mortgage rates won't rise signifcantly due to the feds policy.  They said it will remain the same until the end of 2014.  Another thing, motgage rates don't matter to people who pay cash.

 

http://www.mercurynews.com/business/ci_22532592/look-at-who-paid-cash-bay-area-homes

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landlord_newbie
Posts: 29
Registered: ‎11-17-2012

Re: "I WOULD HOLD BACK ON HOME PURCHASES FOR A LITTLE WHILE"

For as often as the "chinese" investor were/are/will be blamed for the rising price, US is a country of diversity. I saw Flippinos/Indians/Japaneses/Koreans lining up to see open houses.

If one gets money in his/her pocket to buy houses legally, so be it.

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lexa
Posts: 1,983
Registered: ‎05-13-2009

Re: "I WOULD HOLD BACK ON HOME PURCHASES FOR A LITTLE WHILE"


sheriff wrote:

lexa wrote:

bahomeloaner wrote:

I suggest you to be firm in whatever you decide. You either join the crowd or wait for the next crash which could take 10 years to arrive.


1st one arrived in 5.

once mortage rate rise 2%, game's over.


Mortgage rates won't rise signifcantly due to the feds policy.  They said it will remain the same until the end of 2014.  Another thing, motgage rates don't matter to people who pay cash.

 

http://www.mercurynews.com/business/ci_22532592/look-at-who-paid-cash-bay-area-homes


Fed is not a God, they can say whatever they want, market can force them to loose hold on mortgage rates or face even worse outcome.

In fact, Fed always wanted mortgage rate as low as possible during thr 1st buble being blown. But they could not hold them down and game was over by 2007.

 

there is just finite # of such people and finite # of their cash, many of them investors who would not invest into overheated market. smart money come 1st and leave 1st.

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sheriff
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Re: "I WOULD HOLD BACK ON HOME PURCHASES FOR A LITTLE WHILE"

[ Edited ]

The recession and housing market crash was caused by the banks givings loans to people who could not make their payment.  At the time anyone who had a pulse could get a zero down loan.  That is not the case today.  Today's buyers have good credit, good income, and large down payments if they don't buy with cash.  Nothing now is like 2007.  The smart money came in 2009-2011 and is staying because they get good returns on their investment.

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SamShuehRealtor
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Registered: ‎10-27-2008
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Re: "I WOULD HOLD BACK ON HOME PURCHASES FOR A LITTLE WHILE"

[ Edited ]

It has happened in CA where the Irarians snatched up commercial properties. The Japanese was the next group in the 1980s. In China since just about every official is behind get rich quick scheme as NY Times article stated. After some lengthy investigation I suspect little can be done. Their investigation chief is likely to be on the team. They can manipulate the market to some extend unload and ship profit back as US investment $ getting tax break etc to complete an investment cycle. Money is funneled most to Canada and Bahamas before coming to the US as corp investments. Some is personal and much is state funds in the hands of corrupted officials hands (~95% officials). Where does the Russians get the money to purchase mansions and commercial properties? How about the Vietnamese sydicates?  Many are mom and pop families get frustrated by nearly zero (0) interest since Feds kept the interest so low. They need to diversify their holdings and real estate seems to be a good choice.

 

One should refrain from jumping into speculation mode if the fundamentals can not support it. Cash flow, cap rate etc are all part of the measurements used to see if it makes sense or not.  I recall people were betting homes will still go up 35% a year as late as 2007 before. Most are fools merely follow the crowd.

 

 

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lexa
Posts: 1,983
Registered: ‎05-13-2009
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Re: "I WOULD HOLD BACK ON HOME PURCHASES FOR A LITTLE WHILE"


sheriff wrote:

Today's buyers have good credit, good income, and large down payments if they don't buy with cash.  Nothing now is like 2007.  The smart money came in 2009-2011 and is staying because they get good returns on their investment.


today's buyer's may have all that, but prices tomorrow would depend on tomorrow's buyers.

 

nobody guarantees smart money good returns or low inflation rates forever. Once they find higher return elsewhere, they'd 1st to leave.

as far as rates, no mortgage (cash RE purchase) does not mean there is no leverage behind some smart money RE purchases.