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Rainer
149,106
Ken Jones, Commercial Real Estate
Kenneth J. Jones, Inc. - Toms River, NJ
Serving Central & Northern New Jersey Since 1971

Fred Griffin Florida Real Estate This is what I understand of the Evergrande situation:

1. They're more than $300 billion in debt.

2. They have less than $15 billion in cash (less than 5% of their debt).

3. The Communist Chinese government isn't likely to bail them out because the government is also financially strapped.

4. There are no potential buyers for the assets of Evergrande because the majority of the Evergrande portfolio is poor quality real estate.

5. The housing market in Communist China is faltering and prices are falling.

In my opinion, Evergrande will likely file bankruptcy and will have to liquidate. This will only add to the downward trend of real estate prices in Communist China which will further erode their government's asset base.

As for what this means for the United States remains to become evident. As I see it there are two potential scenarios:

1. The Communist Chinese government and its private investors will pull back all foreign investment which may relieve the upward pricing trend in the United States, although should not be a significant influence, or

2. The Communist Chinese government and its private investors will increase investment in US real estate assets as a hedge against the losses they will incure from the Evergrande situation.

In my opinion, scenario 2 is more likely to occur than scenario 1. Then, again, only time will tell.

Sep 16, 2021 04:03 AM
Rainmaker
2,634,937
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Cause and effect is obvious and far-reaching. The word "ripple" affect comes to mind. The epicenter is always the worst hit with outlying areas less so. 

Sep 15, 2021 04:40 PM
Rainmaker
1,716,954
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

I don't see how this can effect us except a U.S. bank gave these guys the funds.

Never knew China was buying U.S. farmland.

Sep 15, 2021 03:28 PM
Rainmaker
985,862
Doug Dawes
KW Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Seems like part of a Chinese Plan to me. They will fail.

Sep 16, 2021 07:43 AM
Ambassador
3,038,209
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Ripple ... stated very simply ... we must be careful who we get in bed with. 

Sep 16, 2021 07:33 AM
Rainmaker
883,137
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

As long as China owned Smithfield Farms is still producing PORK the world will survive.
Sounds to me like China is fishing for some agreement on the South China Sea or the USA gets a third shot from China.

Sep 16, 2021 04:44 AM
Ambassador
5,361,696
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

I suspect that others will look at this as an opportunity and buy it up at a discount.

Sep 15, 2021 08:49 PM
Rainmaker
5,532,960
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Fred,

I have no idea what will happen, but take not of the fact that America  wealth is 3-1 when it comes to Ultra High Net Worth, and that does not include the hight net worth, nor the 1/2 billionaires, nor the billionaires.  We have 15 of the b group here in our county...I may sound optimistic, but I do not think Americans are stupid when it comes to Chinese investment.  I keep my fingers and all resident toes and paws crossed.  A

Sep 16, 2021 02:10 PM
Rainmaker
888,845
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

INTERESTING. Thank you for reminding me I need to read Gordon Chang's book The Coming Collapse of China . . .
Commie Commie Commie Commie Karma Chameleon! 

Sep 16, 2021 12:38 PM
Rainmaker
819,037
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

It's nothing new - buy using someone else's money and don't pay it back. Sound familiar?

Sep 16, 2021 11:32 AM