. August 29, 2006 SouthAmerica: In May 2005 I posted the following on this message board regarding immigration (legal and illegal) and its impact on real estate prices. ***************** âRunning Out of Bubblesâ By PAUL KRUGMAN Published: May 27, 2005 Remember the stock market bubble? With everything that's happened since 2000, it feels like ancient history. But a few pessimists, notably Stephen Roach of Morgan Stanley, argue that we have not yet paid the price for our past excesses. ******************* SouthAmerica: There are two economists that I respect their opinions, and in the above column one of them is mentioning the other one. Regarding Paul Krugmanâs column: Years ago one of the top real estate economists in the US was Mr. Jack Lessinger. I remember reading one of his books more than 12 years ago â âPenturbia.â In that book he gives a full analysis of the real estate market in the entire country, county by county. There is one thing that I remember that he mentioned on his book â that the real estate market in the New York Metropolitan area, and in the Los Angeles area were at least 50 percent above the price that was justified in economic terms. Rentals were inflated as well. He said that the main reason for the real estate price inflation on these two markets was Immigrants. If wasnât for the high volume of immigrants moving to these areas the rentals, and real estate prices would be 50 percent lower. That is the only information that I remember after reading that book many years ago. Today, Homeland Security rules make it very hard for a lot of people to come to the US. In the domestic front, seems to me that when I watch CNN News - the US has started a war against its illegal immigrants. Life is becoming miserable for the illegal immigrants, and very soon many of them will have no choice but return to where they come from. States are making very hard for them to get a driving license. It is illegal for them to get a mortgage to buy a house. Employers will receive very heavy fines if they hire an illegal immigrant. In some of these debates on television they estimate that there are close to 20 million illegal immigrants living in the US today. The flow of new illegal immigration also is slowing down since it is well publicized in most countries when the US has deported the illegal immigrants that they catch. This illegal immigration factor should affect in a negative way real estate prices at least in these two metropolitan areas. .