Interesting piece at kausfiles.com.
Excerpt:
Real estate prices started to plummet just as expectations of imminent semi-amnesty were turning into the reality of harsher enforcement. Schools in immigrant heavy areas of L.A. for example, reported declining enrollments in 2006. The nationwide character of the Gran Salida became apparent, even to the press by early 2008. It seems highly plausible to me that there is some non-trivial causality running between the decrease in the net inflow of illegal immigrants and the real estate bust–all the immigrants who have disappeared would have had to live somewhere. Even if they were renters, not buyers, they would ordinarily have bolstered the value of housing stock. (And some were buyers–search for “this borrower has gone back to Mexico and has no intention of returning.”)
Brian Brady says:
Let me take it a step further:
http://www.nctimes.com/articles/2006/10/05/news/top_stories/3_00_0010_4_06.txt
No tarieta verde? No casa!
Landlords and small business owners, in Escondido, should be livid. Here’s a quote from the article that amused me:
“One by one, American cities are going to be doing the same,” said Claudia Spencer. “And one by one, Americans are going to be getting their cities back.”
Ms. Spencer will get her city back; at a 40% discount.
November 19, 2008 — 8:27 pm
Russell Shaw says:
Any real estate over-supply problems here in Phoenix were turbo-charged by the e-verify law and Sheriff Joe’s sweeps. We have some entire neighborhoods (Maryvale, for example) that practically became a ghost town overnight. There are so many empty houses (the owners just walked away and left their homes to head back to Mexico) there now it is almost beyond belief.
November 19, 2008 — 10:27 pm
Robert Kerr says:
So, illegal immigrants, who largely worked for below minimum wages, were a primary factor that drove home prices up?
I don’t think so.
Yes, sure, “they have to live somewhere,” but aside from the now-famous $15K/yr strawberry picker buying an $800K home with ninja finance, that somewhere for the majority was with 3 or 4 others in the cheapeast apartment possible, in a terrible area, not in a single-family home.
I certainly see the coincidence, but mass emigration is an effect of the collapse, not the cause. What’s next, some blogger blames the outflux of migrant farm workers for the onset of winter?
November 20, 2008 — 12:55 am
Aaron says:
Greed did it..plain and simple..
-Aaron
http://www.sandiego-appraiser.com
November 20, 2008 — 1:10 am
Ken Montville says:
Ummm. I think this might be a bit of a stretch. Certainly, the crackdown on illegal immigrants seems to have some causality (Prince William County and Loudon County in Virginia are other examples) but I have to agree with Robert (above) that it may just be an interesting coincidence.
The high foreclosure and short sale incidence in Prince George’s County, MD (my neck of the woods) is a great counter-example – low immigrant population relative to the general population or the immigrant-to-general population in surrounding Counties. The issue in Prince George’s relates directly back to the “creative” financing of the early ’00s – ARMs adjusting, falling home prices, etc.
Blaming bad immigration policy for the housing crisis is a smoke screen. If that were the case, the housing issues would be highly localized and they’re not.
November 20, 2008 — 6:19 am
J Boyer Morristown NJ says:
Interesting ideas, though I do not think that the immigrants had that much of an effect on that many cities around the country. Though I will point out that I have shown a number of lower priced homes in my area where there are 12 to 15 people living in the home. 3 bedroom homes with dinning rooms, living rooms, basements, … all converted into bedrooms. Needless to say that the people living in these homes are not native of New Jersey. These homes happen to be in the neighborhoods with the highest foreclosure rate, but for the most part seem to be owned by people who had purchased them thinking they would fix them up and flip them.
November 20, 2008 — 7:25 am
Thomas Johnson says:
All market pricing is at the margin. Prices move when there is one more buyer/seller at the market price at the margin. To wit: a 1/8% change disqualifies/qualifies certain borrowers at the margin, just as $50/month extra/less payment disqualifies/qualifies that one borrower at the margin. Or, that one extra workplace sweep by Sheriff Joe might encourage a family to boogey at the margin. All the factors when taken in aggregate at the margin, move prices in one direction or the other at the margin. This concept is quite well known to floor traders who operate in a fast pricing environment on lots of borrowed money.
When we started day trading our houses, we shouldn’t have been surprised that pricing would move like a fast trading commodity pit. It’s just that houses are not traded in the open outcry system, no matter how much venture capital you throw at pricing/search data sites.
November 20, 2008 — 8:06 am
Doug Quance says:
There is a domino effect to what we are witnessing.
Part of the rise of housing sales and prices were a direct result of immigration… and an even larger part was due to illegal aliens (not to be confused with migrants, which they are not).
The influx caused many established residents to flee, and the combination of new-found equity (from market demand) and easy, low-cost financing made the move up a seemingly logical one for many to pursue.
I know many homeowners who left because as the illegals populated their neighborhoods, the problems began. Everything from simple issues like too many cars and trucks in the driveways (and streets) to more complicated ones – like rising crime and declining public education – made many flee. These neighborhoods are now in disrepair with awful market values.
Since many of these people were involved in construction… and now are out-of-work – the problems are even worse. To top it off, many of their kids are involved in gang activity – and that activity has resulted in more crime, which further depresses property values.
I don’t pretend I have all of the answers… but I can plainly see some of the problems. Instead of allowing so much illegal invasion (and it was allowed, don’t kid yourself) we should have been training our poor to work in many of these skilled fields that the illegals were working in – which would have improved their lives and improved society, as a whole.
November 20, 2008 — 9:45 am
Sean Purcell says:
Apparently there is a blue moon tonight because I find myself in complete agreement with Robert Kerr. Come on… a macro-economic cycle exacerbated by a legislature that alternately bullied and bribed lenders into making poor loans is actually the fault of illegal aliens? Reread Thomas Johnson for a dead-on evaluation.
@Brian – so the people of Escondido are going to lose home value because they don’t condone illegal activities? Is every city becoming San Francisco? Let me ask a question: if you knowingly housed a bank robber, is it reasonable to expect you might be charged with aiding and abetting?
The ACLU is once again fighting their way to the forefront of irrelevance. How the “American” CLU comes to find itself suing Americans in defense of illegal aliens would be ironic if it weren’t so common.
Not all illegal immigrants live in overcrowded, irresponsible conditions – but some do. Not all illegal immigrants create demand that pushes housing prices up – but some do. I would be curious to see a study comparing any housing equity gain due to illegal immigration demand and housing equity depreciation due to neighborhood degrading conditions.
I understand the desire to enter this country, legally or otherwise. Despite the self-loathing practiced by some Americans, a great many of the world’s inhabitants still consider this the land of milk and honey. But that should not prevent us from recognizing when the law is broken. Are illegal aliens to become the next “protected class” in America?
November 20, 2008 — 1:08 pm
Brian Brady says:
“Let me ask a question: if you knowingly housed a bank robber, is it reasonable to expect you might be charged with aiding and abetting?”
Come on, Sean. Valjean just stole a loaf of bread.
“But that should not prevent us from recognizing when the law is broken. Are illegal aliens to become the next “protected class” in America?”
We’re going down the path of xenophobia at best, racism at worst, and protectionism for sure. Since when did we horde the milk and honey? I’ll bet you a shot of Jameson that Sherrif Joe Arpaio didn’t invade Seamus McCaffery’s Pub to round up those nasty undocumented Irishmen, Himself being a fair and just man (that’s an example of blarney for you heathens)
I have an idea. Let’s round up all the illegals and make them work for The Big Three for $61/hour, inclusive of their health benefits. We’ll solve all the negatives associated with those nasty illegals and save the Big Three a buck an hour.
November 20, 2008 — 5:07 pm
Jeff Brown says:
I’m speechless.
November 20, 2008 — 9:55 pm
Robert Kerr says:
Well, I guess that makes me a racist, xenophobic, protectionist. Who knew?! 😉
Maybe there’s an alternative? Maybe we can rework the guest worker visa program, allow migrant workers in to work and earn money when we need/want them, and also force them to leave when the season is over?
We get the itinerant labor we need. Workers get the jobs and money they want.
Anyone who thinks that letting illegals stay probably hasn’t met or doesn’t know any legal immigrants. (And if Sheriff Joe is going after illegal Mexicans but not illegal Irish, then shame on him)
Try explaining to somoene who’s jumped through every legal requirement, has maintained steady, documented over-the-table employment, has paid income and paryoll taxes, pays for his own health care, has a perfectly clean criminal record and has waited 8 years or more for a green card that the fellow who just hopped the border can stay in the USA.
The guest worker system is broken but amnesty is not the answer.
We cannot possibly afford to employ, house, shelter and feed the rest of the world. This isn’t the early 20th century. We don’t have a billion acres of unpopulated, undeveloped western lands.
November 20, 2008 — 9:56 pm
Brian Brady says:
“Maybe there’s an alternative? Maybe we can rework the guest worker visa program, allow migrant workers in to work and earn money when we need/want them, and also force them to leave when the season is over?”
Or let them move on to another job (like drilling), in another state, like…
“We don’t have a billion acres of unpopulated, undeveloped western lands”
…Alaska?
I know my stance seems unpopular but when did we, as Americans, ever start thinking from a mindset other than abundance?
There is a better answer than rounding them up like dogs and jailing them. We send billions across the globe in hopes of eradicating poverty and disease and have unemployed Americans who scoff at jobs beneath their dignity. Why not stop sending money worldwide and start fixing the problems we have here with the unexpected largesse this labor pool offers? I’m not talking about the bad guys, here; I’m talking about the people who come here because they can’t get that loaf of bread at home.
I’m thinking the competitive kick-in-the-ass these folks would give us might just jumpstart this economy.
November 21, 2008 — 12:16 am
Robert Kerr says:
I’m thinking the competitive kick-in-the-ass these folks would give us might just jumpstart this economy.
I’m thinking that in this economy, having shed 1M jobs this year, now losing 250K jobs a month, our problem isn’t a shortage of workers.
I have to admit that I haven’t followed anything but the economic aspects of illegal immigration and if enforcement in various areas is truly treating illegals like dogs, that needs to change.
November 21, 2008 — 8:28 am
Sean Purcell says:
I’ll bet you a shot of Jameson that Sherrif Joe Arpaio didn’t invade Seamus McCaffery’s Pub to round up those nasty undocumented Irishmen
Obfuscation: a primary aspect of the Irish blarney we both love so much. Is there an Irish illegal immigration issue I didn’t know about? When the Irish did come to this country (before their economy ran better than ours) they came legally – in huge droves – and were treated as poorly as any group to freely touch foot on these shores. But they had a goal: assimilate. Raise their children to be Americans which, after all, was the greatest nation in the world. Now we have cultures that are offended at the notion that they should assimilate to American culture. This is de facto the case with illegal immigrants because they cannot assimilate… they are ILLEGAL.
They do recieve education, medical treatment, drivers licenses! and a plethora of other societal handouts. I guess a dog’s life is not that bad.
Let’s please not lionize people who break the law. They “can’t get a loaf of bread at home” but their… what… their spunkiness is going to give us the “competitive kick-in-the-ass” we all need? Again, I find myself with Mr. Kerr. There must be an inherent fairness in the system or the wheels come off. May I direct your attention to the current mortgage mess. The people who made poor decisions, took too much risk and/or broke the law are getting “amnesty” while the homeowners that did everything right get to watch. Might be a little anger brewing there, yes? Should we call them names and claim they are protectionist too? When did it become racist to point out that rewarding the criminals is unjust?
Creating a disadvantage for citizens who play by the rules is not right. Nor is it in the long-term benefit of our society – whether it be mortgages, taxation to redistribute wealth or immigration.
November 21, 2008 — 9:07 am