If you live near a big city or one of our coasts, you were probably pretty surprised and likely disturbed to hear the President banned entry or re-entry of immigrants from one of 7 Middle Eastern and African countries. From the various reports I’ve read, you were probably less affected if you lived in middle America. Maybe there aren’t as many immigrants there, though that would seem odd since immigration is such a lightning rod issue in middle America. To try to bring home the impact and implication of this Presidential Executive order, you need look no further than its potential effect on real estate.
I have a listing in the City of Thousand Oaks. It’s been on the market for about two weeks. In that two week span I had 5 offers. While we in real estate don’t look at the color of our client’s skin, we can’t help but notice their country of origin. Often times our clients were born abroad. Very often they are here on one type of visa or another working for one of the many tech or biotech companies that have made their home in California. In the case of this specific listing, the 5 offers I had were from buyers whose point of origin was from outside the U.S. I had 3 offers from Chinese nationals with visas to work here, all engineers or scientists. I had an offer from a young family from Iran, but presumably of Armenian descent based on their last name. In their letter to the owners that accompanied their offer, was a picture of them and their two babies with Santa caps on in front of a Christmas tree. The fifth and final, which was the highest and an all cash offer, came from an international biotech businessman from Iran. He wanted his wife and children here so his girls could attend high school and college in California. We took this man’s offer. It was the highest by a small margin and was all cash. We signed off on the offer on Friday, opened escrow and planned for inspection Monday. On Saturday the man flew home… to Iran. My immediate reaction upon hearing the President’s order banning people from Iran from entering our country was concern for my seller. He and his family have relocated and was thrilled to get such a great offer from such a great buyer, but that was before the Executive Order banning Iranians from entering our country. I’ll never forget sitting in my car Saturday morning listening to Fox News on satellite radio and thinking, my God, we are now in a binding contract with someone who may never be able to re-enter our country.
I have to assume the President was well intentioned in his ban, but here I am, a Realtor in a suburban community in Southern California and my client’s and I have been directly, immediately and negatively affected by this Presidential Executive order. 2 out of my 5 offers were buyers who were born in Iran. 3 from China. Could they be next? Aside from all the terrifying possible implications about racial and religious profiling, just strictly talking business, this action is bad for business. It’s bad for real estate and it’s bad for the tech companies that have provided so many jobs world wide because they depend on these highly intelligent and highly skilled workers to do the work that there aren’t enough qualified Americans to do. Just look at the outcry from Microsoft and Google.
When you think about all the foreign property owners in the U.S. you can’t help but be more than a little concerned for the American real estate market. I mean what if foreign owners feel that American real estate is no longer a safe place to invest? What if they begin liquidating? In Nazi Germany when the Jews had to sell either as forced by the government or out of desperation to get something for their assets, they sold at a steep discount. We saw what happened during the Great Recession to real estate values when distressed sellers and banks sold en masse, value plummeted. I’m not suggesting this is what is going to happen but I am suggesting that this creates an air of uncertainty and uncertainty is bad for real estate and bad for business.
Bad for business. Never thought President Trump would be accused of that.