7 ms·

It's impossible to read almost any mass-media article about real estate without leaving wearied by loaded phrases and unfounded conclusions. In what other sphe

by sk5t 7y ago

It's impossible to read almost any mass-media article about real estate without leaving wearied by loaded phrases and unfounded conclusions. In what other sphere is a decrease in purchasing "fleeing the market"? Where are the fire sales, or even, where are the begrudging foreign property sellers? Still somewhat fresh in memory are NAR economist Lawrence Yun's bizarre rationalizations in the runup to the 2008-09 GFC.

eloff 7y ago
I agree those things are typical in articles like this, but a 40% drop in foreign sales can quite reasonably be described as fleeing the market. It's not a trivial decrease.
- JMTQp8lwXL 7y ago
  It needs context. Are 100% of American home buyers foreign? Wow, that's quite dramatic. Are 20% of buyers foreign? Okay, so that's an aggregate decline of 8 percent-- while impactful, not nearly as exciting of a number, which matters in a journalistic sense these days.
  - sachdevap 7y ago
    Note that an 8% decline does not capture the demand implications. If the market is pretty sensitive to demand, 8% is a pretty big number.
bilbo0s 7y ago
I don't know man? What was it? Like 36% decrease in foreign buying overall? China specifically was like a 60% decrease? I'm not an expert or anything, so what I think means exactly jack. Having mentioned that, those decreases seem to me to be far in excess of anything that could be reasonably explained by economic factors alone. Something must be going on. "Fleeing" seems like a legitimate label for it.
- roenxi 7y ago
  It says in the opening paragraph "tighter currency controls by the Chinese government". As with most financial articles there is no discussion of the relative magnitude of the effects at play. Financial journalists are perfectly happy to ignore the elephants in the room and report a laundry list of tiny effects that might have had an impact and then devote 1 line to whatever causes 80% of the change observed. Fleeing implies they have a choice and are choosing to leave because of poor prospects in US housing. That might be true. But the choice might be involuntary or be due to sharply rising prospects in China or elsewhere. If China those capital controls are significant, maybe a better title is "Chinese purchasers dragged away from US housing kicking, screaming and cursing their own government". That is a possible interpretation based on what is included in the article.
  - fabianhjr 7y ago
    > As with most financial articles there is no discussion of the relative magnitude of the effects at play. Principal Component Analysis is really difficult to do on a live economy because no one is omniscient and policies/events enter and go in a less than ideal simultaneity.
  - bilbo0s 7y ago
    But 36%? I mean, the Canadians don't have currency controls. Neither do the Mexicans. All three of the Big Three foreign real estate buyers have pulled back in a material fashion this year. Like I said, I just think something must be going on here. I don't think this can be waved off as "Well, it's just China."
    - tapatio 7y ago
      Wot? "Hispanics are experiencing the largest homeownership gains of any ethnic group in the U.S., a turnaround for the population hardest hit by the housing bust that could help buoy the market for years." https://www.wsj.com/articles/wave-of-hispanic-buyers-boosts-u-s-housing-market-11563183000 https://www.wsj.com/articles/wave-of-hispanic-buyers-boosts-...
xbmcuser 7y ago
The main problem Chinese face currently is getting money out of China that is the reason Chinese property purchases are down it is the same in Asian cities and countries where Chinese were doing a lot of purchases last few years.
RomanBob 7y ago
>price goes up People can't afford housing because Chinese are buying up all the houses. >price goes down People lose life savings because Chinese are not buying up all the houses.
- inlined 7y ago
  And yet somehow I managed to time my purchase right in the inflection point.
- i_feel_great 7y ago
  >prices remain the same Zero growth, return on investments bad, need economic stimulation quick
- rxhernandez 7y ago
  I don't agree with either statement at all but the second statement seems predicated on the first. That is, some people bought in a bubble the Chinese created and they lost their savings when the bubble popped and the Chinese stopped buying. This does not at all resemble the dichotomy of, damned if you do or damned if you dont, like you seem to be implying. Again I do not agree with either statement even remotely. I haven't done any serious research on the current housing market and dont harbor any feelings or ideas on it.
- JMTQp8lwXL 7y ago
  In a dual-sided market, price movement negatively impacts one group, and positively impacts the other. The negative headline generates more clicks.
cltsang 7y ago
These sentimental words definitely serve better as triggers of trading algorithms. Maybe related?

by sk5t 7y ago

eloff 7y ago

I agree those things are typical in articles like this, but a 40% drop in foreign sales can quite reasonably be described as fleeing the market. It's not a trivial decrease.

JMTQp8lwXL 7y ago
It needs context. Are 100% of American home buyers foreign? Wow, that's quite dramatic. Are 20% of buyers foreign? Okay, so that's an aggregate decline of 8 percent-- while impactful, not nearly as exciting of a number, which matters in a journalistic sense these days.
- sachdevap 7y ago
  Note that an 8% decline does not capture the demand implications. If the market is pretty sensitive to demand, 8% is a pretty big number.

bilbo0s 7y ago

I don't know man? What was it? Like 36% decrease in foreign buying overall? China specifically was like a 60% decrease? I'm not an expert or anything, so what I think means exactly jack. Having mentioned that, those decreases seem to me to be far in excess of anything that could be reasonably explained by economic factors alone. Something must be going on. "Fleeing" seems like a legitimate label for it.

roenxi 7y ago
It says in the opening paragraph "tighter currency controls by the Chinese government". As with most financial articles there is no discussion of the relative magnitude of the effects at play. Financial journalists are perfectly happy to ignore the elephants in the room and report a laundry list of tiny effects that might have had an impact and then devote 1 line to whatever causes 80% of the change observed. Fleeing implies they have a choice and are choosing to leave because of poor prospects in US housing. That might be true. But the choice might be involuntary or be due to sharply rising prospects in China or elsewhere. If China those capital controls are significant, maybe a better title is "Chinese purchasers dragged away from US housing kicking, screaming and cursing their own government". That is a possible interpretation based on what is included in the article.
- fabianhjr 7y ago
  > As with most financial articles there is no discussion of the relative magnitude of the effects at play. Principal Component Analysis is really difficult to do on a live economy because no one is omniscient and policies/events enter and go in a less than ideal simultaneity.
- bilbo0s 7y ago
  But 36%? I mean, the Canadians don't have currency controls. Neither do the Mexicans. All three of the Big Three foreign real estate buyers have pulled back in a material fashion this year. Like I said, I just think something must be going on here. I don't think this can be waved off as "Well, it's just China."
  - tapatio 7y ago
    Wot? "Hispanics are experiencing the largest homeownership gains of any ethnic group in the U.S., a turnaround for the population hardest hit by the housing bust that could help buoy the market for years." https://www.wsj.com/articles/wave-of-hispanic-buyers-boosts-u-s-housing-market-11563183000 https://www.wsj.com/articles/wave-of-hispanic-buyers-boosts-...

xbmcuser 7y ago

The main problem Chinese face currently is getting money out of China that is the reason Chinese property purchases are down it is the same in Asian cities and countries where Chinese were doing a lot of purchases last few years.

RomanBob 7y ago

>price goes up People can't afford housing because Chinese are buying up all the houses. >price goes down People lose life savings because Chinese are not buying up all the houses.

inlined 7y ago
And yet somehow I managed to time my purchase right in the inflection point.
i_feel_great 7y ago
>prices remain the same Zero growth, return on investments bad, need economic stimulation quick
rxhernandez 7y ago
I don't agree with either statement at all but the second statement seems predicated on the first. That is, some people bought in a bubble the Chinese created and they lost their savings when the bubble popped and the Chinese stopped buying. This does not at all resemble the dichotomy of, damned if you do or damned if you dont, like you seem to be implying. Again I do not agree with either statement even remotely. I haven't done any serious research on the current housing market and dont harbor any feelings or ideas on it.
JMTQp8lwXL 7y ago
In a dual-sided market, price movement negatively impacts one group, and positively impacts the other. The negative headline generates more clicks.

cltsang 7y ago

These sentimental words definitely serve better as triggers of trading algorithms. Maybe related?