Apr
18

Will the U.S. Real Estate Market Crash with a Weak Dollar

Filed Under Real Estate Investing 

United States dollarReal estate investing is changing in the United States and throughout the world. A few excerpts from a recent USA Today article:

“10 years ago, eBay changed the world, sort of by accident.”

What’s next?

Where does eBay go from here? (Meg) Whitman shifts into her presentation persona. First, she says, eBay will keep expanding worldwide. Today, in about 15% of transactions, the buyer and seller are in different countries. “I’d be surprised if that’s not 50% to 60% 10 years from now,” Whitman says.

“And think about what that means for eBay and the world - about connecting the Third World with the industrialized world.”

EBay is one massive online garage sale and the news that in about 15% of the transactions buyers and sellers are in different countries is unbelievable. Simply amazing!

So what does this have to do with real estate? EVERYTHING, and that’s the point. Right now the world and how we do business is radically changing before our very eyes. Yet most people do not see the changes. They choose to only see the things directly in front of them.

While the U.S. dollar is losing value, the Euro and other currencies are becoming stronger. That means that U.S. real estate becomes an attractive bargain for European citizens. Combine that with the statistic that 15% of eBay buyers and sellers are in different countries and you might see a different future for American real estate.

We have seen this before. Remember when the Japanese yen was strong, and the “Japanese were buying everything” because U.S. Investments were seen as a steal? We’re likely to see an influx of foreign investors into American real estate and it will start with larger commercial properties and trickle down into residential. Actually, we are seeing that this movement is already in full swing!

Another benefit of a weak U.S. dollar is the increase in tourism. When the currency exchange favors foreigners, they are able to buy goods and services at a discount and this encourages travel and spending. For those in real estate, this translates to increased property values in tourist hotspots. For example, renting flats (condos used as vacation rentals) has long been popular in many parts of Europe and the world and could become common in many popular U.S. tourist locations.

Although I keep my eye on the big picture, I actually run my real estate business much like a fisherman approaches fishing:

“The ocean has a high tide and low tide, but all I really care about is whether the fish are biting.”

-Gerald Romine

The same thought translated to real estate means I take what the market gives me. Keep your investing simple and the profits will follow.

Author: Gerald Romine

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