Adding Flesh to Symbols theory - Rich Chinese buying US property

[sishya]

Symbols( $#*) made a comment about why the Chinese reserves are not rising as fast as their surplus and put fort an argument that either rich political chinese are taking their money outside their country or Foreign companies liquidating and repatriating their capital or hot money flowing out.

It looks like we are starting to see confirmation - Rich Chinese are starting to buy foreclosed properties in southern california...

Below NBC video

http://www.nbclosangeles.com/around_...s_Angeles.html

[hoodoo]

Re: Adding Flesh to Symbols theory - Rich Chinese buying US property

Ahh to see them look admiringly at the staged homes full of granite countertop and faux oak trim.

Let's see - what exactly are they buying here in California...

Bubble built housing with poor quality craftsmanship inside and out.
HOA fees: $200-400 per month
Property tax: 1.1%
Mello Roos: 0.7%
Property that is still overvalued by 20-30%
Property being pushed by the slimiest of agents eager to get their nut.
Property with local amenities that are collapsing before our eyes (grocers, strip malls, etc.)

Let 'em buy.

Hoo

[petertribo]

Re: Adding Flesh to Symbols theory - Rich Chinese buying US property

Bubble built housing with poor quality craftsmanship inside and out.

The above is never mentioned but stands to reason. Bubble, labor hard to get, inspectors looking the other way, high demand means cheaper crap materials etc. A lot of these houses are going to have heavy maintenance costs over the years. I wonder if Case/Shiller factor this in at all.

Son of a friend of mine worked in the Building Inspection Department of a major US city. His father had run a lumber mill so the kid knew building materials etc. He said the construction methods and materials on a lot of jobs was really inferior. Just like Mortgage Appraisers, a lot of people in the Building Chain either looked the other way or engaged in criminal activity.

[sishya]

Re: Adding Flesh to Symbols theory - Rich Chinese buying US property

Bubble built housing with poor quality craftsmanship inside and out.

The above is never mentioned but stands to reason. Bubble, labor hard to get, inspectors looking the other way, high demand means cheaper crap materials etc. A lot of these houses are going to have heavy maintenance costs over the years. I wonder if Case/Shiller factor this in at all.

Son of a friend of mine worked in the Building Inspection Department of a major US city. His father had run a lumber mill so the kid knew building materials etc. He said the construction methods and materials on a lot of jobs was really inferior. Just like Mortgage Appraisers, a lot of people in the Building Chain either looked the other way or engaged in criminal activity.

I am thinking of buying a house in california(in an area where house prices went from 600K to 200K) end of this year. I guess then I should not be looking to buy a house built after 2005 ? May be a home inspection can help .

[Slimprofits]

Re: Adding Flesh to Symbols theory - Rich Chinese buying US property

I am thinking of buying a house in california(in an area where house prices went from 600K to 200K) end of this year. I guess then I should not be looking to buy a house built after 2005 ? May be a home inspection can help .

From my experience in Northern California, that being having rented two different homes over the last few years that were both finished and lived in for the first time in '04, you'll want to bump that back in terms of being cautious.

[johnnybill45]

Re: Adding Flesh to Symbols theory - Rich Chinese buying US property

Any house in CA that went from 600 to 200K is either in a crime riddled neighborhood or 50 miles from any metro area that has jobs. In my opinion, those cities may not be able to provide acceptable public services, utilities and waterworks in the future - due to continued economic problems. Plus, you won't have any neighbors or your neighbors will be guys with tattoos on their necks! Or you'll have renters who can never seem to pay the rent. The "buying a house as an investment" game is over.

John in California.

[cjppjc]

Re: Adding Flesh to Symbols theory - Rich Chinese buying US property

I am thinking of buying a house in california(in an area where house prices went from 600K to 200K) end of this year. I guess then I should not be looking to buy a house built after 2005 ? May be a home inspection can help .

Always, always when purchasing a resale home find a neighborhood first. Older homes are often better built. If they are dated and need updating in the kitchens and bathrooms the price will reflect this. In the lower price ranges, older homes in the northeast often have hardwood floors. Newer homes often do not. Adding hardwood floors later is expensive. Take your time when you are previewing the home and property. You usually can tell if a house is well built after you've been in a couple of good ones and a couple of bad ones.

[GRG55]

Re: Adding Flesh to Symbols theory - Rich Chinese buying US property

I am thinking of buying a house in california(in an area where house prices went from 600K to 200K) end of this year. I guess then I should not be looking to buy a house built after 2005 ? May be a home inspection can help .

I'd be careful about buying a house built any time this decade in any of the bubble markets...

Bubble built housing with poor quality craftsmanship inside and out.

The above is never mentioned but stands to reason. Bubble, labor hard to get, inspectors looking the other way, high demand means cheaper crap materials etc. A lot of these houses are going to have heavy maintenance costs over the years. I wonder if Case/Shiller factor this in at all.

Son of a friend of mine worked in the Building Inspection Department of a major US city. His father had run a lumber mill so the kid knew building materials etc. He said the construction methods and materials on a lot of jobs was really inferior. Just like Mortgage Appraisers, a lot of people in the Building Chain either looked the other way or engaged in criminal activity.

Is anyone surprised?

What I noticed in recent years is considerable "high-end" construction where lots of expensive materials have been used; most of it installed incorrectly. When it comes to housing it's what you can't see that counts. Given the speculative mentality that characterized the latter stages of the housing boom, what you can't see might be a substructure of pressed oatmeal, on which the finishing materials have been glued.

Caveat emptor!

[sishya]

Re: Adding Flesh to Symbols theory - Rich Chinese buying US property

Any house in CA that went from 600 to 200K is either in a crime riddled neighborhood or 50 miles from any metro area that has jobs. In my opinion, those cities may not be able to provide acceptable public services, utilities and waterworks in the future - due to continued economic problems. Plus, you won't have any neighbors or your neighbors will be guys with tattoos on their necks! Or you'll have renters who can never seem to pay the rent. The "buying a house as an investment" game is over.

John in California.

Thanks for all the reply. I was particularly speaking about places like Mountain House, Tracy, Manteca, CA. Here 5 Bedroom, 3 baths newer homes are going for 250K(which were going for 650K as recently as 2006/2007). Crime is also low, Yeah much lower than Chicago near suburbs, where I used to live 6 months ago. This is only for living, not investment.

[petertribo]

Re: Adding Flesh to Symbols theory - Rich Chinese buying US property

May be a home inspection can help .

From what we now know about the RE biz, I would be very wary of anyone working in it in any capacity, including home inspectors. As in: Is the home inspector from the local area and you are not? Does he have any connections to local RE interests? The home inspector's loyalties may lie locally and not to you. I would be very diligent in all aspects of a house purchase, including the lawyer. Keep uppermost in mind that a lot of fees and commissions are based on the sale occurring as opposed to not occurring.

Not from CA myself, but from what I hear you would also want to check out the fiscal soundness of the Municipality or County if that applies.