Foreign Cash Could Boost Housing Market

By: Allan Heller ~ November 17, 2007

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Here is an interesting article which helps explain why prime real estate in the coastal areas of Orange County are experiencing stable to increasing sales prices.

AP
Foreign Cash Could Boost Housing Market
Saturday November 10, 2:35 am ET

By Stephen Bernard, AP Business Writer

Foreign Cash Could Provide Much Needed Relief for U.S. Housing Market Thanks to Weak Dollar

NEW YORK (AP) — The weakening dollar has caused many problems for consumers, but it may also be providing the fuel for one unintended — and very welcome — benefit: a rally in the struggling housing market driven by foreign investors.

For an individual or developer trying to sell a home, interested buyers are just as likely to already have a place in London or Paris as they are to be first-timers new to the market.

“European investment is likely to pick up,” said Mark Vitner, chief economist for Charlotte, N.C.-based Wachovia Corp. “Now is the time to come over and take advantage.”

The theory goes that foreign investors step in and replace first-time home buyers who have been squeezed out of the housing market during the recent downturn. These new investors in turn allow current homeowners to sell and trade up to larger homes.

That will help restart owners moving up the housing ladder, a process that had been key to economic growth in recent years.[read more …]