Since the residential real estate meltdown hit the Valley, neither low prices nor low interest rates have been enough to excite enough potential homeowners to trigger a rebound.
And the problem is far worse for luxury homes.
Real estate experts fear a prolonged recovery for the most expensive houses, but they are eyeing a proposal that could boost sales in that market by luring foreign investors.
Under a bipartisan bill in the U.S. Senate, foreigners would be issued a new homeowner visa if they invest at least $500,000 in residential real estate. Buyers would have to pay cash. The plan aims to boost the economy by collecting more tax revenues by those visitors as well as absorbing the glut of high-end homes.
The real estate market for high-priced homes is especially slow now, said Mesa real estate agent Doug Coats. Homes priced at $400,000 and above are the most difficult to sell because of financing qualifications, he said.
The bill would do more if buyers could finance homes instead of having to pay cash, Coats said.
"I don't think there's that many people who could come in and absorb the inventory and that there would be a measurable effect," Coats said. "It's a terrific idea, but why should it be just to exclusive homeowners? Why just 500,000-plus?"
Even the bill's sponsors admit the plan isn't a cure-all. The proposal is from Senators Charles Schumer, D-New York, and Mike Lee, R-Utah. Their bill would give 3-year visas to foreign nationals who pass a background check and pay taxes in the U.S. They could buy multiple properties but their principal residence would have to cost $250,000.
Also, they would have to stay in the U.S. at least 180 days a year. A buyer could bring a spouse and minor children but would have to apply for a work visa to have a job.
Buyers would not be eligible for benefits like Social Security or Medicare, and they would have to leave the U.S. upon selling the property.
The bill would accelerate high-end sales a little bit, said Jay Butler, professor emeritus of real estate in the Morrison School at Arizona State University. While the all-cash requirement is a drawback, Butler said many foreigners do pay cash when buying homes here. He doesn't see the visa as a huge draw.
"The foreign investors have been extremely active for quite a while," Butler said. "I think most of them see it as an investment, not necessarily a reason to come to the United States."
Homes that cost $500,000 or more made up 4 percent of the Maricopa County market in the fourth quarter of this year, he said.
The visa incentive would draw the most local interest from the Asian market, said Richie Laser, a real estate agent who focuses on Ahwatukee Foothills. He welcomed the idea because of how slow the market is for more expensive homes. Homes at $250,000 or less can sell in 90 days but the time doubles once prices reach $400,000, he said.
"I think it will be a small impact, but we can use anything that we can get," Laser said.
Butler said most real estate experts had figured the residential housing market would begin picking up in 2010. He views this visa proposal as one of many legislative attempts to revive the market by "putting the paddles to the heart and see if we can get it going again."
Housing will get its biggest boost only with a stronger economy, he said.
"You need lots of confidence and belief in your job to make this commitment," he said, "especially in these troubled times."
• Contact writer: (480) 898-6548 or ggroff@evtrib.com
soricobob posted at 4:52 am on Mon, Nov 28, 2011.
It is working in Florida. The Germans and Canadiens have become a sizable segment of the Southwest Florida population, thanks to real-estate investments. They have settled in certain areas and, in turn, restaurants and shops have sprung up to accommodate their tastes; an interesting side effect.
wdgnas posted at 7:24 am on Sun, Nov 27, 2011.
i thought the reason for giving the tax breaks in 2000 and 2010 was so the money would be spent, keeping the economy going. what is with all the 'luxury' homes for sale?
paulbove posted at 11:59 pm on Sat, Nov 26, 2011.
Refinancing replaces your current mortgage with a new loan that has a more favorable interest rate and terms that you can afford to manage. The new loan is secured on the same property as your current loan. I refinanced and saving $451 every month! search online for 123 REFINANCE they got me a 3.11% rate
Tigere posted at 2:49 pm on Sat, Nov 26, 2011.
"Foreign" money has always driven the housing booms in Az ... Canadians, Califonians and all points eats US ... this however is a whour of another kind ...
cuzitsthere posted at 2:25 pm on Sat, Nov 26, 2011.
This makes zero sense. Why would someone want to pay US taxes for the privilege of owning a home here when they don't have to? One can already own as many homes as they want and visit 180 days of the year.
Joseph P posted at 1:28 pm on Sat, Nov 26, 2011.
not the smartest cookie, but this has proven over and over that this is a bad ideal, take Detroit, first they took places from hard workers all their life's that is on a fixed income (they like the younger person that has lost their job are all Americans, But then turned around and sold these places after turning whole neighborhoods into trash heaps for pennies on the dollar like $3000. for a 150 thou house, the people whom buys these has no intention of living in them, that's for the illegals, confirmed criminals and whatever they want to rent to to live in, then to top it all the "political leaders" will not let the police enforce any laws on these people because it's not politically correct, The answer is NO don't do it
Leon Ceniceros posted at 12:06 pm on Sat, Nov 26, 2011.
The Mexican drug dealers started flooding into Downey, California where I lived in the late 1980's . Now it has become the "Brentwood" of the Mexican Mafia and Mexican Drug Dealers. Ranch style homes have now lost their wood siding and shake roofs and been plastered over and tile-roofed to look like little, "Ensenada, Mexico". Old olive and oak trees replaced with 30 foot palm trees. When you drive down these lovely sububan streets you don't hear the joyous cries of children playing, the barking of a happy dog but the 300 decible sound of Mexican drug rap or salsa blaring from open windows and doors (for some reason air-conditioning, which all of these homes had, is never turned on...only to prove that you can take a man out of the country but not the country out of the man). I remember seeing "his and hers Mercedes with big red bows at Christmas parked outside in the rain in front of the garages....now why would anyone let a $75,000.00 Mercedes sit in the rain unless what was in stashed in the garage worth 10-100 times more). Oh, I almost forgot the caravans of black Cadillac "Escalades" that would pull off the main street and drive menacingly down the street to the "narco's" house for a "meeting". Now that would go down great in Las Sendas....wouldn't it....looking out of your huge bay windows and watching "Don Sinaloa" and a couple suv loads of his henchmen arriving for your newly "visa-ed" Mexican neighbor for their "Casa Calientita = House Warming" fiesta............lol.
I see that a Utah Mormon Senator was this stupid's Bills..."co-sponsor"....boy, Temple Square will just not let that ...Utah Compact...agenda go away....will they ???
ralpho posted at 11:04 am on Sat, Nov 26, 2011.
Its not enough I have to compete with my fellow Arizonans to own a home.
I now have to compete with rich foreigners who are given a huge perk citizenship to out compete me.
If you want our system to work please treating groups of people special let everyone have a level playing field.
There was no bailout in the law. It was bankruptcy in the law If you mess up.
As long as not everyone has the same rules.
Explain why I should continue to play.