An influx of foreign buyers and Internet money could be creating conditions for another bubble in California's housing market, says one real estate expert.
Kathy Fettke, CEO and co-founder of The Real Wealth Network
, told J.D. Hayworth and John Bachman on "America's Forum" on Newsmax TV that she is "concerned" by what she is seeing in California's real estate market.
"In California, for sure, Chinese buyers have been active," Fettke said. "We see that they have been looking for a safe place to put their money because they're seeing that they're in a bubble actually in China and are trying to get their money out.
"It's dangerous because this kind of 'I'll take it as is, top dollar, over asking price, bidding war,' is back in California full-on. We just saw people make an offer on a tear-down. Literally the foundation was completely rotted, the home was rotted, and the buyers came in as is, all cash.
"There is [also] massive job growth in California. We have bounced back, and as a result we've got these young Internet millionaires who are buying real estate and it looks cheap to them and they don't understand the investment," she said Tuesday.
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Fettke said that with the exception of pockets like Modesto and Stockton, "the California market is now above the average population's ability to buy."
"It's very sad," she said.
Fettke added that the three factors to monitor when investing in real estate are the strength of the job market, the level of population growth, and affordability.
"More important than ever, you've got to know what you're doing," Fettke said. "I, of course, am a firm believer that you can build tremendous wealth in real estate if you do it right, if you buy right. We should have learned by now that you can also lose your fortune if you do it wrong."
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