How Illegal immigrant aspect is affecting commercial real estate

Question

we know that commercial real estate really depends on interest rate.

but what's the relationship between illegal immigration and CRE ? well, there's relationship.

All these theory is surfacing lately. We know the unemployment number is reduced heavily, but that number 90 percent is coming from part time jobs while full time people is losing job. So the BLS is accounting for those illegal immigrant. When those illegal immigrant is working it gives pressure to wage so it reduce inflation, but also reduce unemployment.

Since unemployment is reduced, there's not much pressure for the Fed to reduce rate. In fact, Fed things to increase one more hike this year. With high interest rate we know some CRE/banks would get hit.

But I heard also, gov. is trying to do loan modification as much as possible to those CRE in distress.

So lot of thing going on in the background that's very interesting ...

Jacopo Iasiello · Answer

Illegal immigration can impact labor markets and economic dynamics, its direct influence on commercial real estate is intertwined with broader economic trends, government policies, and market conditions.

Carlos Ptriawan · Answer

I am about to say these illegal immugrant thing is pre-designed to keep the rate artificially high.

Chris Seveney · Answer

There are many factors that impact macro-economic situations. For example immigration last year had numbers of aruond 3M people. This is good for economy and spending but bad for housing affordability because that many more people add to the housing requirements.

You could also look at interest rates and monetary supply, interest rates probably are not going anywhere until monetary supply comes down - but in speaking with some banks they are losing money month over month on deposits which really hurts banks.

So a lot of moving parts in the economy, all I will say is people need to understand what happens if things get better or get worse. Many of the people here on BP unfortunately do not understand how to evaluate risk - because if they did they would not be doing a lot of these creative finance deals we are seeing that include having to borrow for the down payment because they have zero liquidity.