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."
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