Bill Seeks To Entice Foreigners To Buy U.S. Homes With Visa Offer

The government may turn to foreigners to shore up the weak housing market.

A bill co-authored by Senators Charles Schumer (D-N.Y.) and Mike Lee (R-Utah) aims to use the appeal of U.S. residence visas to entice foreigners to buy American homes, according to The Wall Street Journal. If passed, the bill would offer a U.S. residence visa to any foreigner who makes a cash investment of at least $500,000 in U.S. residential real estate.

"This is a way to create more demand without costing the federal government a nickel," Schumer told the WSJ.

Foreign demand for American homes has been growing as prospective American buyers remain skittish. Foreign purchases of U.S. residential real estate rose 24 percent to $82 billion in the year ending in March 2011 compared to the year before, according to the National Association of Realtors.

Both low housing prices and a weak U.S. dollar have made American real estate an enticing bargain for foreign investors, according to a Capital Economics report cited by DSNews.com. For example, American homes now are more affordable for Canadians than at any time in the past 35 years.

Total foreign sales of U.S. homes were split between recent immigrants and people living outside the U.S., according to the National Association of Realtors, indicating that many foreign homeowners buy with the intent of moving to the U.S. As many as 60 percent of China's wealthy have emigrated or are considering doing so, according to a recent Bain study cited by The Financial Times.

In an increasingly uncertain investing environment, some foreign buyers have found a safe home for their money in the U.S.' best-known streets, such as Fifth Avenue and Pennsylvania Avenue, said Jay Koster, president of Americas Capital Markets for Jones Lang LaSalle, in an interview with Reuters.

"They can work here, be close to the city, be close to their corporations and still feel like they're on vacation. I think that's really what grabbed everybody," said Mary Pat Spekhardt, a New Jersey real estate agent at Coldwell Banker, in an interview with CNBC.com.

Meanwhile concerns about the job market and declines in household wealth may be keeping prospective American homebuyers from entering the housing market. In addition, declining home values are keeping current homeowners from buying a new house because they would need to take a large loss to sell their current home. Housing prices have fallen 32 percent since the peak of the housing boom in 2006, according to the S&P/Case-Shiller Home Price Indices.

At the same time, the number of foreclosure notices has grown, and one major U.S. bank has given up on finding buyers for all of its foreclosed homes. Bank of America recently decided to give up 100 of its Cleveland-area homes to be bulldozed; the bank has similar plans in Detroit and Chicago, according to Bloomberg News.

Comments

[munki]

11:35 AM on 10/23/2011

Vegas... So many are being bought up by...

[Gilbert Albright]

10:21 AM on 10/22/2011

The is another RIPOFF! The banks rake in all the money from the sales of the homes and the TAXPAYER is stuck with the bill for all the kids these foreigners pop out while living here that are now U.S. Citizens. Then they use the kids as a justification to get FULL U.S. citizenship later.

This is a win for the Banks, a win for the Foreigners and SCREW JOB of the the American Taxpayer!

[guveqzero]

07:06 AM on 10/22/2011

An obscenity. The lost hope Americans feel is that these homes should be going to our children, as they enter the workforce from school. But, we know 85% of them go back to live with their parents already carrying a debt burden. Unfair, lousy, and obscene.

[yishai ettebe]

06:49 AM on 10/22/2011

Why would I want a US Visa? I don't want to be another number to the IRS thank you very much.

[Siebenstein]

11:18 PM on 10/21/2011

It's getting w0rse by the minute in this country.
We need to pour into the streets in the millions; why aren't we?

[Siebenstein]

11:17 PM on 10/21/2011

s1ck

[Siebenstein]

11:16 PM on 10/21/2011

This is 51cl beyond measure.

Foreigners should buy up what we have been thrown out off?
Occupy these p1g5 in congress.

[mookie11]

10:00 PM on 10/21/2011

Time for chuckie to get voted out.

[builderman55]

07:42 PM on 10/21/2011

Well shoot, since we're sending jobs overseas, maybe we can get some of those same foreigners to invest in our housing stock. Since our own government is working assiduously to turn us into a Plutocracy/Oligarchy where the middle class barely exists, maybe rich people in other countries can buy houses here as vacation spots. Or, the poor can rent them from them...

[Dave Hellbent]

06:32 PM on 10/21/2011

Stop trying to manufacture demand to inflate the cost of housing to a point where the average American can't afford to participate anymore! Let the housing market fail and fall to a price that we can afford again.

[Andy49]

02:22 PM on 10/21/2011

Charles Schumer makes me ill. He is my senator and I would not vote for the Wall Street lackey ever again. I believe that he is bought and paid for by his Wall Street friends. I also find it disgusting that we have to sell visas. My wife's oldest daughter is waiting for a immigrant visa and I will probably die before it is processed. First it was visas for investment in devleopmens and now it is for homes. The huddled masses are a thing of the past just bring us your rich folk.

I wonder if the rich visa holders will vote with Schumer or against him?

[Charles Mills]

02:13 PM on 10/21/2011

Um... NO. How about we start marketing these at the lowest possible prices and terms to AMERICANS?

[NamithaSF]

01:05 PM on 10/21/2011

It seems the US govt will try anything except giving low to moderate risk homeoners access to the ultra low interest money the banks get.

[fineartgalaxy]

11:13 AM on 10/21/2011

Let's see what we have here. All Homeland Security issues and former preoccupation with our borders are now up for sale. Whoever can pay for a house comes here. Of course, they will be checked and screened, right? Really? This just does not feel right.

[Paleo Man]

10:49 AM on 10/21/2011

Heaven forbid that the market should be allowed to reach the point where Americans can buy the homes in question. Looking at the graph of housing prices in real dollars going back to 1900 or so, it is apparent that the "bubble" involved unsustainable high pricing. And even current pricing has not yet fallen to historical levels in real dollars.

The unsustainable high pricing of homes was made possible by government guaranteed home loans, so that lenders knew they were taking no real risk in loaning a lot of money based on unsustainable appraisals. Selling Visas is immoral and contrary to everything that this country should be about. Time for those who made or allowed loans based on unrealistically high valuations to take a bath, a big bath. Time to allow the market to allow Americans to buy these homes at realistically low prices without artificially propping up the prices.