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I would argue that foreign investment plays almost no role. Homes generate cashflows (rents). Rents are a function of local economy (paychecks). What one is wi
by agent008t 7y ago
I would argue that foreign investment plays almost no role.
Homes generate cashflows (rents). Rents are a function of local economy (paychecks). What one is willing to pay for a home is a function of rents, risks, interest rates and expected changes in rents, risks and interest rates.
If home prices are not detached from these fundamentals (and is there evidence that they are?), some investor is going to buy them, foreign or local.
- cjhanks 7y agoThe U.S. economy is one of the most stable in the world, and certainly the most stable of any major world power. In fact, many economies are directly tied to the value of the dollar directly or indirectly. A lot of foreign investors are simply trying to put their money in US assets. Most conservatively in treasuries, least conservatively in the stock market. Housing falls somewhere in between. To these investors, the fundamentals of the housing market don't apply as rigidly.