Foreign investment in American real estate
In Trulia’s International House Hunter Report released Tuesday morning, the real estate search company reports that the foreign share of American home searches fell, but points out the silver lining that despite increasing housing prices, real estate in the States is seen as among the safest investments.
Based on all home searches on Trulia between April 1 and June 30, 2012, the report tracks which U.S. metropolitan areas prospective foreign buyers are looking at and how that has changed over time. The report notes that the foreign share of U.S. home searches fell nearly 10 percent year over year.
In a statement, the company said, “Since the housing bubble burst, falling home prices across the U.S. real estate market have attracted foreign home searchers, most notably from Canada, the United Kingdom, Germany and Australia. However, U.S. asking prices rose nationally 0.3 percent Y-o-Y in June after years of price declines. As a result, foreign searches – as a share of all the searches on Trulia – fell by nearly 10 percent in the last year. In the past year, the share of foreign-based searches has dropped the most in local markets where prices have risen the fastest.”
Trulia reports that foreign buyers spent $82.5 billion on U.S. residential real estate in the last year, but as prices continue trending up, as they have in 84 out of the 100 largest metros quarter over quarter, buying habits could change as investors are turned off by the price increases.
Miami and Los Angeles are still very highly favored in searches for American real estate by those outside of the nation, with 60 percent of all foreign searches landing somewhere in Florida. Below is Trulia’s outline of the top most searched cities coming from abroad:
Eurozone crisis and the American housing market
In the Eurozone crisis nations, banks are failing, and debt is piling up, but U.S. real estate is still viewed as a relatively safe investment.
“Although Europe’s financial troubles have been a global economic threat, the Eurozone crisis had a silver lining for U.S. housing in 2011 as Europeans looked to American real estate as a safer investment,” said Trulia’s Chief Economist, Dr. Jed Kolko. “Last year, the share of searches from Greece, Spain and Italy increased, bucking the international trend. Now, however, the foreign search share is declining even from those Eurozone crisis countries.”
Dr. Kolko concluded, “Foreigners attracted to real estate bargains get turned off when prices increase. Investors want to buy when prices are at their bottom, but they’ll start to lose interest when prices rise 15 percent, as they have in Miami and Phoenix. Demand by people looking to scoop up bargains can dry up quickly when prices rise.”
Boomers retirement may be the true reason behind the labor shortage
(ECONOMY) Millennials and Gen Z were quick to be blamed for the labor shortage, citing lazy work ethic- the cause could actually be Boomers retirement.
In July, we reported on the Great Resignation. With record numbers of resignations, there’s a huge labor shortage in the United States. Although there were many speculations about the reasons why, from “lazy” millennials to the number of deaths from Covid. Just recently, CNN reported that in November another 3.6 million Americans left the labor force. It’s been suggested that the younger generations don’t want to work but retiring Boomers might be the bigger culprit.
Why Boomers are leaving the labor force
CNN Business reports that 90% of the Americans who left the workplace were over 55 years old. It’s now being suggested that many of the people who have left the labor force since the beginning of the pandemic were older Americans, not Millennials or Gen Z, as we originally thought. Here are the reasons why:
- Boomers are more concerned about catching COVID-19 than their younger counterparts, so they aren’t returning to work. Boomers are less willing to risk their health.
- The robust real estate market has benefitted Boomers, who have more equity in their homes. Boomers have more options on the table than just returning to work.
- Employers aren’t creating or posting jobs that lure people out of retirement or those near retirement age.
As Boomers retire, how does this impact the overall labor economy?
According to CNN Business, there are signs that the labor shortage is abating. Employers are starting to see record number of applicants to most posted jobs. FedEx, for example, just got 111,000 applications in one week, the highest it has ever recorded. The U.S. Bureau of Labor Statistics projects that the pandemic-induced increase in retirement is only temporary. People who retired due to the risk of the pandemic will return to work as new strategies emerge to reduce the risk to their health. With new varients popping up, we will have to keep an eye on how the trend ultimately plays out.
Is the real estate industry endorsing Carson’s nomination to HUD?
(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?
NAR strongly backs Dr. Carson’s nomination
When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”
At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?
The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.
In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…
Job openings hit 14-year high, signaling economic improvement
The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.
Job openings hit a high point
To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.
The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.
Good news, bad news, depending on your profession
That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.
Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.
If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.
If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.
Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.
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