Immigrants Head for Mid-Tier Cities, Could Be Real Estate Boon
- Mar 16, 2010
March 16, 2010
By Dees Stribling, Contributing Editor
A study by the Lusk Center for Real Estate at the University of Southern California has found that an increasing number of immigrants to the United States are moving to places other than the standard gateway cities of New York, Los Angeles and Chicago. Instead many of these new Americans are favoring smaller cities where the cost of living is lower and jobs are easier to come by.
The paper, “Immigrants and Housing Markets in Mid-Size Metropolitan Areas” by Gary Painter, director of research at the Lusk Center, and Zhou Yu, an assistant professor at the University of Utah, looked at 60 cities with housing priced lower than in the major gateways. A number of mid-sized areas, including Nashville, Detroit, Colorado Springs, Minneapolis, Sarasota and El Paso, have shown an average 27 percent rise in new immigrant population at a time when the gateway cities are losing residents. The immigrants in these metro areas come from all over the world, with the largest numbers from Mexico and China.
Though immigrants tend to have lower homeownership rates than native-born citizens, Painter posited that waves of immigration to these places could nevertheless have a stabilizing effect on home values, and that cities should try to attract immigrants with employment opportunities and networks of real estate agents and lenders with the same ethnic backgrounds, the better to build strong ties to the new arrivals.
“There’s no doubt that population growth of any kind can help support the real estate market in the short- and long term,” Painter told CPE. “The only differences with immigrants are that it may take a little longer before they transition to homeowner than it would a native population, and that immigrants are likely to live in larger households.”
Mad at The Donald
It might seem obvious that uncompleted Trump International Hotel and Tower – Fort Lauderdale, a condo-hotel project that was hit with foreclosure action by the holder of its $139 million mortgage last week, would have something to do with real estate showman Donald Trump–besides the name, that is. Apparently not, and at least one buyer is peeved about it, alleging in a lawsuit that buyers were misled about the involvement of the bouffant’d Trump.
In fact, the Trump Organization claims Trump isn’t a developer of the project, which was to be a 298-unit beachfront property. He merely licensed his name for it, since at some point in the past “Trump” was an asset allowing the actual developers to charge more. The property’s units ranged in price from $500,000 to more than $3 million, once upon a time.
Those were the days. Now the project is a mess of suits, including the aforementioned one about Trump as well as others by buyers trying to get their hefty deposits back. It’s the kind of property that promises to keep attorneys busy for quite a while.
Charles J. Antonucci Sr., the former president and CEO of the Park Avenue Bank of New York, has been arrested for trying to defraud the Troubled Asset Relief Program. Prosecutors assert that Antonucci made false statements to Treasury Department regulators in an effort to obtain $11.2 million from the program. It’s the first criminal case involving TARP (but officials noted that there will be more).
The bank had essentially sunk under the weight of bad commercial real estate investments by the time it asked for TARP funds. That money would have presumably would have kept Park Avenue going while, the charges allege, Antonucci siphoned money from the bank in various ways.
Park Avenue was closed on Friday by the New York State Banking Department, which appointed the Federal Deposit Insurance Corp. as receiver. Wayne, NJ-based Valley National Bank will take over nearly $500 million in deposits from Park Avenue.
Industrial Production Up Again
According to the Federal Reserve, U.S. industrial production for February increased only 0.1 percent, but that was despite the East Coast snowstorms (again with the storms? They still seem to be on every number-cruncher’s mind). It was nevertheless the eighth straight monthly increase in industrial production.
The Fed’s survey of that part of the economy goes back over 90 years, and since then the indicator has had a rising streak of eight months or more only 16 times. Each time has been a fairly good sign that the economy is growing. February’s increase was attributed to growing demand for business equipment, especially computers and semiconductors.
Wall Street had a bumpy day on Monday and ended up mixed. The Dow Jones Industrial Average gained 17.46 points, or 0.16 percent, while the S&P 500 was up a minuscule 0.05 percent. The Nasdaq registered a 0.23 percent decline.