Saturday, June 25, 2011

Cash-rich foreigners buying up prime coastal USA

How to Benefit from Depressed Housing and a Declining Dollar

[Skip down a half-page] The Fed’s monetary manipulations – which are both weakening the dollar and suppressing short-term interest rates – are drawing growing numbers of all-cash buyers into the housing market. Foreign all-cash buyers, in particular, are becoming a conspicuously large presence in several regional markets like South Florida. In dollar terms, for example, the US median single-family home price has dropped nearly 30% since mid-2005. But in terms of the Brazilian real, the median in US single-family home price has tumbled more than 50%. That’s a big reason why Brazilians are combing the streets of South Beach looking for properties to buy. But understand that while this might cause Miami real estate to appreciate, Milwaukee real estate will not.

Posted by drewster @ 02:18 PM (1429 views)
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2 thoughts on “Cash-rich foreigners buying up prime coastal USA

  • The USD is the self proclaimed yard stick currency, whose health, should be judged against a basket of currencies (Dollar Index) rather than the Brazilian Real which has done very well against all comers.

    As with all well timed media, it dispenses advice for one trend pattern, just after that trend has broken and things are headed in the other direction. (Observe the pound drifting from 1.65 to 1.59 (and falling); also interesting progress in the Dollar Index).

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  • It’s not just the Brazilian Real though. The GBP and USD do seem to be sinking more than the rest of the world’s currencies. €1.10 to £1 holiday rates.

    The point is, this phenomenon of foreigners snapping up prime real estate isn’t just limited to London. It’s happening everywhere in what used to be the richest countries. We ignored it when the Brits were buying fly-to-lets in Barcelona and Prague; but now it’s happening to us too.

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