But foreign money can’t hurt

Your home ('s buyer) here

Your home (‘s buyer) here

Chinese, among others, seek safety in US real estate. If you’ll excuse the reporter’s perception that a million-bucks is a lot of money, the basic facts are true: high-end houses are selling, while the middle-grounds is not. That’s a reversal of what was happening in the market just a year ago.

My partner Fudrucker is incredibly busy with Chinese buyers at the moment; in fact, he’s off to China in two weeks to explain, and sell, we hope, the Greenwich market to potential buyers in that country, and I’m sure he’s not the only Realtor responding to international demand. As bonuses shrink for the mid-level Wall Streeters and soar for the top, Greenwich property owners should cross their fingers and hope for continued instability in the east, including, of course, Russia.

25 Comments

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25 responses to “But foreign money can’t hurt

  1. Walt

    Dude –

    Francis is going to China? To sell rear estate? Reary?

    Are you sure he isn’t just finery furry defecting to becoming a FULL FREDGED COMMIE? Is he going dressed in his rittle Mao suit? Or maybe his is reary just going to Phukit, because of all the sordid sex stories you have told him over the years? That is a real possibirity.

    I bereave the ratter!! But he still needs a Chinee name. May I suggest Me Munch Yu Dong? Mi Suk Kok? Dum Gai? JUST MESSING WITH YOU FRANCIS!! I know you ribtards have no sense of humor, so pull the chopsticks out of your ass, and righten up.

    Here are some funny Chinee jokes, to hep you break the ice when you rand there:

    Why is there no Disneyrand in China? Because no one is tall enough to go on the good rides!!

    What happens when a PR and a Chink make a baby? A car thief who can’t actuarry drive is born!!

    Did you hear the one about the Chinese Godfather? He makes you an offer you can’t understand!!

    And why would the Chinee want to move here? Our takeout sucks. They do eat chink food for takeout? Right Dude? And even if he doesn’t sell any dirt, he will probably get a great price on sharply starched shirts. Can I drop over some of my raundry before he reaves?

    Your Pal,
    Walt

  2. Publius

    Greenwich is a tertiary market for a lot of foreigners. Asians tend to buy in a major city like NYC or in the city closest to where their kids go to college. Latinos buy in Miami and surrounding areas and Russians in London and New York. The other venue for foreign money is the visa program whereby if a foreigner invests at least 500k and the project creates US jobs, they get a green card. There has been a lot of funding of commercial real estate in the past 2 years under this program. I will concede the point that purchasing a house in Greenwich will lead to lots of jobs locally but the legality of the hires is dubious.

    • anonymous

      Larchmont is heavily French.

      • Publius

        Define “heavily” as in 25% of the residents of Larchmont are French or as there are 6 French families living in a 1/2 mile radius of each other. I would be surprised if the French were driving the Larchmont real estate market.

        Foreign money has heavily influenced New York and Miami high/higher end residential real estate. After that the impact is de minimis at best.

    • Quite right, so far as I can see. NYC, yes, Greenwich, not much of a draw. We’ll see if Fudrucker can’t change that but I’m dubious. If you see me tooling around town with a load of Chinamen in my truck bed, you’ll know it’s working but otherwise ….

      • Publius

        CF,

        Ah yes, “Chinamen”. I have not heard that expression since I played army as a kid against the Japs and the Nazis…….

        That may qualify as a hate crime……

      • AJ

        The Chinese find that term highly offensive; however, I don’t think the terms Englishman, Frenchman, or Irishman are found offensive by any of those groups. And my German half doesn’t seem to be bothered by the terms Heinie or Kraut: two words Vic Morrow is almost certain to have used.

      • A condo on Greenwich Hills Drive closed in November that was purchased by a Chinese guy whose son works in Greenwich. Cash deal. So it is going on now.

  3. Anonymous

    I thought fudrucker was more focused on finding investment properties with his Chinese partners….

  4. Libertarian Advocate

    If nothing else, he can count on their prodigious propensity to gamble in order to prop up CT lottery ticket sales.

  5. Anonymous

    Thanks for providing a great example of how the interests of realtors are inexorably at odds with the long term interests of buyers, homeowners, and the community at large, and why realtors should be treated with the degree of trust and respect ordinarily reserved for convicted felons. It’s in no one’s best interests long term to make Greenwich into Midtown — a vast, empty zone consisting almost entirely of investment properties the value of which is totally dependent on the wild swings of the international economy. The externalities of these investment zones include pricing nearly everyone out of the market, deadening communities, and making buying a home an even riskier proposition than it already is. Communities should not be stock markets. Especially when those markets rely on the performance of unsophisticated, barbarous economies like Russia and China.

    But the realtors can make some quick bucks, so sell, sell, sell! In this sense, you’ve got a lot in common with the rapacious Round Hill types you regularly excoriate here. But, you know–not rich.

    • Fell better now that you’ve got that off your chest? Good! Happy New Year.

      • Libertarian Advocate

        Yowch…. That MUSTA hurt!!!!

      • Walt

        Dude –
        Can you believe what Anon at 10:15 said? What an ignoramus.

        “…and why realtors should be treated with the degree of trust and respect ordinarily reserved for convicted felons”. Just what does he have against convicted felons? THEY ARE PEOPLE TOO!! What did a convicted felon ever do to him?

        Did a convicted felon ever sell him an overpriced pile of dirt? NO!! Drive him around for a few days, show him a few houses, than charge him TEN TIMES AS MUCH as if he took a chauffeured stretch limo stocked with hookers and blow? NO!!

        So I resent this unfair portrayal of convicted felons. And isn’t that redundant? Don’t you need to be convicted to be a felon?

        Anyhows, what are we doing tonight? J Club? Key Parties? What time does Dick Clark come on TV? And why did he stop posting here? What time are you picking me up? And you are not getting 6% of the value of my house for giving me a ride!!

        Your Pal,
        Walt

    • My rant

      Salespeople in all fields find/service demand.

    • AJ

      Give it up: your town got flushed down the toilet years ago. You might consider moving to this little piece of God’s country: just minutes from the Titus Mountain ski area and only $3,000 down and $56 a month to make it yours. Comes with a brand new steel roof and it’s only 45 minutes from Montreal.

      http://www.realtor.com/realestateandhomes-detail/33-S-Pearl-St_Malone_NY_12953_M38625-01353?row=126

  6. FlyAngler

    Hmmm, potential Chinese buyers with deep pockets going to come to Greenwich and buy homes in the $3-7mm range no one else wants. Hmmm, that sounds familiar but I can’t recall why….

  7. AJ

    Take note of number 3.

    “. . . After two years of bubble-type price increases, the big question for housing in 2015 is: will the Echo Bubble continue expanding, or will it follow its 2002-2007 sibling’s epic bubble pop and decline? To answer the question, we first need to identify the key trends that have enabled the expansion of the Echo Bubble.

    There are three key dynamics underpinning housing’s Echo Bubble.

    1. The unprecedented intervention of the Federal Reserve to push mortgage rates to historic lows. Nothing fancy here; lower rates serve two purposes central to the policies of central banks everywhere: they enable marginal buyers to qualify to buy homes, and they boost prices higher.

    2. The post-2008 slump in housing construction and the demand for rental housing pushed inventory down and demand up. This led to a classic imbalance of supply and demand: as demand by investors and overseas buyers rose, inventory fell. Prices naturally skyrocketed in areas with tight inventory and high demand.

    3. The end of the Fed’s monetary easing/money-printing devastated the periphery emerging-market economies, forcing capital to flee to safe havens such as U.S. real estate. As China and the emerging economies that had boomed as Fed money poured into their economies rolled over, those who had accumulated fortunes rushed to transfer their wealth (often ill-gotten) into safe havens such as the U.S.

    The goal wasn’t just to transfer capital, but safeguard the families’ physical safety; buying a house with cash is the ideal solution. This dynamic has fueled a vast all-cash housing trade in areas favored by foreign capital: New York, Miami, Los Angeles, San Francisco, Vancouver, etc.

    The question then boils down to: are these trends likely to continue or fade? To answer that, we have to refer to a fourth dynamic, one that undermines the entire Echo Bubble: the erosion of household income.

    How can housing prices keep rising as household income continues declining in real terms?

    The Fed and federal housing agencies have reversed the natural downward pressure on demand and prices by making mortgages incredibly cheap and reducing the down payment requirements. This enables marginal buyers to qualify, but the previous housing bubble revealed that enabling marginal buyers to qualify for mortgages triggers a time-bomb of defaults: last ones on, first ones off.

    Marginal buyers are the first to default when lay-offs, divorces, medical crises, etc. arise, as they inevitably do.

    Here is a chart of per capita income. This broad measure of income doesn’t reflect the enormous skew in household income to the top 5%–a reality that is thoroughly covered by Doug Short in Household Incomes Across Time: The Divergence at the Top 5%. In effect, most of the gains in income and wealth over the past decade have flowed to the top 5%, leaving the bottom 95% with . . .”

    http://www.oftwominds.com/blogdec14/echo-bubble12-14.html