The Foreigners are Back!

STRVEJHX-You posit so much!ARE you a successful businessman,commencerate with your ceaseless opinions[often well developed sarcastic ,and humerous]?I find you to be incessently negative, and one who will likely miss the momentums upward.Logic and analasis don't necessarily yield good results,IMO.

"who will likely miss the momentums upward."

Undoubtedly, as I just signed a 2-year lease on a 1200 square foot (though some say 1100 square foot - I'll take it!) apartment with 2 balconies on the 21st floor of a great midtown building with views of the Hudson. Would cost $10,000 a month to buy, so if there's going to be "momentums upward," they're going to come after some really big "momentums downward" in the next few years.

I love how the article ends: "The doctor’s apartment has had a renter for the last three months, said Arie Abadi, a real estate agent with Platinum."

At a major, major loss.

BRING ON THE IRISH CARPENTERS!

It's difficult enough to follow the local market, now we're expecting someone lives across the ocean to do so and to trust who?? But the idea of a middleman collecting rent and managing your apartment(s) sounds interesting..

This premise is awesome. NYC is such a great investment @3.5% cash on cash return that you'd want to make it sight unseen. Honestly what becomes of all these condos? Private equity buys and resells or rents?

Maybe a good idea for the Russian Oligarch, or Chinese Industrialist who just wants to make a u.s. real estate investment in case things at home don't work out so well.
For them even -3% is attractive.

A safe house is one thing...but I'd rather hoard TIPS than make 3.5% on a rental...and this 3.5% assumes 100% occupancy.

Which asset is more legally protected. Real Estate or a brokerage account holding TIPS?

Given the amount of treasuries we need to sell as of late, I am sure there are ubersecure means of owning treasuries. I mean if the Chinese couldnt hold treasuries securely, our society could collapse.

The Chinese central bank or Sovereign Wealth Funds probably have nothing to worry. I'm speaking rich individuals.

The foreigners will not come. I am normally in Asia for 50% of my time and I see it first hand. The growth Asia is will not entice any Asian investor to come to North America. Why should they come when average growth is between 6 to 8% per year in almost half the East Asian countries. We keep bragging about Goldman lifting NY out of recession - guys you need to venture outside of your little island and you will realize for yourself. There thousands of Goldman-like success stories out there. Growth in NA is peanuts for investors that could make a difference. There are many other areas in the world that have not potential but actual growth going on.

I am sure rich individuals in China and Russia can invest in treasuries confidently. The cash and cash return on a NYC condo is pathetic. I dont think there are enough foreign morons out there to save this market. True real estate investments are made at good cash on cash yield levels...6%, 8% or more.

"ARE you a successful businessman"

Actually, yes I am. Thank you for asking.

When "The foreigners are coming, hurray, hurray!" is the mantra, you know it's more BS. They said it before here, they said it in Miami and Las Vegas and Phoenix, too.

When the mantra is "The wabbits are coming, huwway, huwway!" THEN is the time to buy!

Eventually the investor (foreign buyers included) will be what stops us from going lower. But buying at these price/rent ratios don't make sense for investors - so, we go lower from here.

Juicy made a prediction of investors "pouring into the market" and a 10% price fall as an "all-in signal."

Investors will pour in when rents > owners' carrying costs. That puts my new rental at $450,000, versus the $1 million it would currently sell for. Ergo, we're a long way from Tipperary.

My I'm musical today, if I do say so myself!

Article never advanced the argument that foreign buying was buoying the market, or that this service was responsible for any particular volume of buying. This article has the look and feel of paid advertising.

Exactly, RS: an infomercial.

Theyve purchased at these ratios before, albeit stupidly. I am sure stories abound in the Irish carpenter circles now about peoples empty $700k studios that they had expected to rent consistently at $2800 a month and gain double digits annually in appreciation.

Rhino, BUY NOW OR BE PRICED OUT FOREVER!

Its unthinkable that prices can hold here...but if they do, its conceivable to rent forever according to your famous math. It works in spades from this entry point.

If prices hold here we will need new theories of economics and finance. Those are unlikely. We have another 50% to fall based on rents. With US unemployment at 10.2% - likely higher in NYC - who buys? Who finances?

Theres a devils advocate argument here that all the bulls have missed. If you make the argument that governments can keep money cheap indefinitely, then conceivably the historical price to rent ratios get thrown out the window. I think the governor said NY unemployment is 17%. In the finance industry, that sets the price of apartments...in Manhattan, it has to be 20% min.

There is only so far price to rent ratios can fall, even with 0% financing, and still make it possible to rent to an unrelated third party at break even or a profit. In fact, even if you had a mortgage with a -1% interest rate - the bank GIVING you money - you still couldn't break even right now.

Well, if you can pay cash then you can make 3%....or maybe 2-something% if you are talking about a condo haha.

Well, if you pay cash you can kiss your Jacksons in the ass good-bye.

I am just saying...I dont follow your math that you couldnt make money with a negative mortgage. Rent is still higher than maintenance...Although the gap has narrowed MASSIVELY over the last 10 years.

But Richard Le Frak has the answer -- give them greencards when they buy an apartment!! Buy now or lose your greencard forever.

I think the article is for idiot buyers, but keep in mind what type of buyer took a unit at william beaver. People in unstable countries with too much cash would gladly buy into US property than have their assets taken away for a dictatorship. What did the article say? The guy had 10 other investment properties?

"My I'm musical today, if I do say so myself!"

If call the sound of fart music than I agree.