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Data points on Chinese real estate investors


By iwog   Follow   Fri, 4 Jan 2013, 2:41am PST   4,364 views   109 comments
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Bringing the Shanghai bubble to a California city near you! All of these stories are from December or 2013. My feeling is that this is just getting started, and these buyers are totally unconcerned about cash flow.

Affluent Chinese Investors Showing Great Interest in U.S. Housing Market
http://cbsfbaymarketwatch.wordpress.com/

Chinese delegation meets with local realtors
http://www.losaltosonline.com/index.php?option=com_content&task=view&id=45157&Itemid=123

Chinese learn about housing market in the Silicon Valley
http://www.mercurynews.com/saratoga/ci_22165368/chinese-learn-about-housing-market-silicon-valley

China Investing in America
http://www.theepochtimes.com/n2/business/china-investing-in-america-325983.html

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JFP   Sun, 6 Jan 2013, 4:28am PST   Share   Quote   Permalink   Like   Dislike     Comment 70

B.A.C.A.H. says

JFP says

It does drive real-estate prices, though.

And with it, the property tax revenue.

God bless them, those high assessments making theirs into "basic aid" districts which frees up more state money for other districts.

Can't disagree with that.

B.A.C.A.H.   Sun, 6 Jan 2013, 4:29am PST   Share   Quote   Permalink   Like   Dislike     Comment 71

JFP says

hyperbole in response to Peter P.'s opposite hyperbole

OK. Please understand, I hear that cr*p from Tiger Parent peerscoworkers in the "Silicon Valley" workplace all the time, and it's said in earnest, not as hyperbole.

JFP   Sun, 6 Jan 2013, 4:29am PST   Share   Quote   Permalink   Like   Dislike     Comment 72

Peter P says

JFP says

I agree to a certain extent, but what I meant was that if most of your kid's friends are not going to college, then it's harder to keep your kid focused on preparing to go to college.

It depends. College is overrated. If they have good plans other than going to college, it is fine.

Yes, but how many do?

B.A.C.A.H.   Sun, 6 Jan 2013, 4:31am PST   Share   Quote   Permalink   Like   Dislike     Comment 73

The military used to be a great option. Sadly though, because of his lies and deceptions and stop-losses, GW Bush ruined it.

Peter P   Sun, 6 Jan 2013, 4:32am PST   Share   Quote   Permalink   Like   Dislike     Comment 74

JFP says

Yes, but how many do?

More now than before. Thanks to the digital revolution.

When I was young, I spent a lot of time in the library. Now, it is much quicker cross-referencing articles and concepts using the internet.

JFP   Sun, 6 Jan 2013, 4:34am PST   Share   Quote   Permalink   Like   Dislike     Comment 75

B.A.C.A.H. says

The military used to be a great option. Sadly though, because of his lies and deceptions and stop-losses, GW Bush ruined it.

Yeh, military is a lot less attractive when there's an endless war on.

JFP   Sun, 6 Jan 2013, 4:36am PST   Share   Quote   Permalink   Like   Dislike     Comment 76

B.A.C.A.H. says

JFP says

hyperbole in response to Peter P.'s opposite hyperbole

OK. Please understand, I hear that cr*p from Tiger Parent peerscoworkers in the "Silicon Valley" workplace all the time, and it's said in earnest, not as hyperbole.

I hear you. But, I think you need to make some allowances given that the majority of people making these comments are immigrants.

MsBennet   Sun, 6 Jan 2013, 5:51am PST   Share   Quote   Permalink   Like   Dislike     Comment 77

Getting back to the topic. What's to say these Chinese investors know what they are doing?

Let's say you put 300K in cash in a small home in Stockton or somewhere that will get little home appreciation, maybe 1% per year. If you charge $1500 a month rent for ones of these places x 12 months over a 10-year period you will have gained 188K in rents and 32,000K in appreciation for a total of:

$210,000.

If you take 320K in cash (extra 20 you will spend in closing costs on the purchase of the home) If you put it in Vanguard's Wellington Fund, which since 1929 has averaged 8.17% per year, at the end of 10 years you will have

$677,000! This with sitting on your butt and having to do nothing!

Now, if this is in a taxable fund, you will pay taxes on it, which will reduce the number, but so will you pay taxes on the home purchase if you decide to liquidate it.

It doesn't make that much sense to me to be investing in these small crappy homes.

Peter P   Sun, 6 Jan 2013, 5:53am PST   Share   Quote   Permalink   Like   Dislike     Comment 78

MsBennet says

What's to say these Chinese investors know what they are doing?

They probably know less than you and me.

The price-to-rent ratio is way out of whack in many places outside of the US. To those investors, they only play for appreciations.

JFP   Sun, 6 Jan 2013, 6:03am PST   Share   Quote   Permalink   Like   Dislike     Comment 79

MsBennet says

It doesn't make that much sense to me to be investing in these small crappy homes.

First, they aren't investing in Stockton. They are investing in SF and the Peninsula where it makes more sense. Secondly, they are more concerned with getting money out of China and putting it somewhere safe than getting a great return.

Peter P   Sun, 6 Jan 2013, 6:09am PST   Share   Quote   Permalink   Like   Dislike     Comment 80

JFP says

They are investing in SF and the Peninsula where it makes more sense.

It makes more sense to invest in a built-out area like NYC and London. Anything that is currently $4000/sqft can become $12000/sqft in the future.

Prices of regular homes are tied to the economy. Too risky.

Think how much your future buyers will have to make in order to give you a nice return?

JFP   Sun, 6 Jan 2013, 6:14am PST   Share   Quote   Permalink   Like   Dislike     Comment 81

Peter P says

JFP says

They are investing in SF and the Peninsula where it makes more sense.

It makes more sense to invest in a built-out area like NYC and London. Anything that is currently $4000/sqft can become $12000/sqft in the future.

They are investing there also.

Prices of regular homes are tied to the economy. Too risky.

Think how much your future buyers will have to make in order to give you a nice return?

That's the Chinese investors problem.

Peter P   Sun, 6 Jan 2013, 6:16am PST   Share   Quote   Permalink   Like   Dislike     Comment 82

JFP says

They are investing there also.

I think so too. So are the Russians, the Brazilians, and the Arabs.

JFP   Sun, 6 Jan 2013, 6:18am PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 83

Peter P says

JFP says

They are investing there also.

I think so too. So are the Russians, the Brazilians, and the Arabs.

The problem for "regular people" in these areas is that the market in a lot of these hot areas is completely divorced from the economic fundamentals of the US.

Peter P   Sun, 6 Jan 2013, 6:26am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 84

JFP says

Peter P says

JFP says

They are investing there also.

I think so too. So are the Russians, the Brazilians, and the Arabs.

The problem for "regular people" in these areas is that the market in a lot of these hot areas is completely divorced from the economic fundamentals of the US.

Sadly, that is the case. But I think it will continue in those area.

The middle-class is incredibly fragile as a group.

gulpher   Sun, 6 Jan 2013, 6:28am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 85

B.A.C.A.H. says

gulpher, as you wrote, you are a Chinese American which means that you are an American, not a Chinese.

I appreciate your observation. It'll be good that we all recognize people living in these of so called 'Chinatown' or 'New Chinatown' neighborhoods are overwhelmingly Americans who are ethnically Chinese.

There is no such thing that you're in suburban China when driving through Valley Blvd in San Gabriel valley. It's suburban America with a different touch than the ones one's used to be.

B.A.C.A.H. says

We know, as do probably you know also, that the present tsunami of elite, wealthy Chinese who're bidding up home prices in coveted Fortress Communities along the Left Coast are Chinese, as in, immigrants from Communist China; not Americans (as in, descendents of previous generations of Chinese immigrants such as yourself).

It's just few wealthy Chinese, from Communist China to be more dramatic, buying in neighborhoods most average Americans have no chance to get in. Like the one I mentioned earlier who bought in Beverly HIlls. It's just a lot cheaper here in her eyes comparing the market in China. I don't know what is the tsunami. BTW, I'm a first generation of immigrant who has made it here. I'm hoping there are more immigrants/future contributing citizens coming to this great land of free.

dublin hillz   Mon, 7 Jan 2013, 6:21am PST   Share   Quote   Permalink   Like   Dislike     Comment 86

Peter P says

They should learn from Jewish parents

Jewish immigrants generally desire the same outcome for their children - how to become a "successful professional" and hence channel their children to study law, business or medicine.

Peter P   Mon, 7 Jan 2013, 6:23am PST   Share   Quote   Permalink   Like   Dislike     Comment 87

But somehow many of them ended up doing much better.

David Losh   Mon, 7 Jan 2013, 7:59am PST   Share   Quote   Permalink   Like   Dislike     Comment 88

MsBennet says

What's to say these Chinese investors know what they are doing?

They know exactly what they are doing, and they aren't buying in Stockton.

The price of property in China is ridiculous, and without any backing. People dump money into China to catch the wave of a Billion person market place.

The people in China, who know how the system works, would like to do business here, and convince more foriegn investors to put money in China.

The Chinese go everywhere in the world to do business. Here in the United States is no different than anywhere else. San Francisco is a hub to Asia, that is where the money is. Vancouver B.C. is a hub, and Seattle to a lesser degree.

The Cinese buy into communities that make sense, and pay a reasonable price. Just because it's a suit case of cash doesn't mean they will over pay.

Nobody   Mon, 7 Jan 2013, 8:38am PST   Share   Quote   Permalink   Like   Dislike     Comment 89

So there goes my chance to buy a home sweet home. I just can't see how this type of investment is good for the locals.

varmint   Mon, 7 Jan 2013, 9:14am PST   Share   Quote   Permalink   Like   Dislike     Comment 90

Peter P says

It makes more sense to invest in a built-out area like NYC and London. Anything that is currently $4000/sqft can become $12000/sqft in the future.

Where is anything $4000/sqft? Manhattan is like $1000, London maybe a bit more but not 4k. Tokyo City is like $600. 4000? That shit cray.

Peter P   Mon, 7 Jan 2013, 9:19am PST   Share   Quote   Permalink   Like   Dislike     Comment 91

Most units in Time Warner Center are at least that expensive.

Peter P   Mon, 7 Jan 2013, 9:20am PST   Share   Quote   Permalink   Like   Dislike     Comment 92

Is The Shard in London selling yet?

thomaswong.1986   Mon, 7 Jan 2013, 11:16am PST   Share   Quote   Permalink   Like   Dislike     Comment 93

JFP says

1. Good schools and higher real estate prices are generally linked.

2. It's easier to isolate your kids from the "tiger-mom" insanity in a school system like PAs, than it is to isolate your kids from a peer culture that discourages school work.

was not the case in the South Bay from the 1960s to 2000. never heard of such links.
its only a recent concept that came from the east coast migrants over the past 5-10 years.

else... where are the armies of students ( the Einstein genius' ) who graduated from the fortresses decades past. Unlikely you will find some genius running around here, cause there are none.. Its all a myth this RE and great school linkage.

thomaswong.1986   Mon, 7 Jan 2013, 11:18am PST   Share   Quote   Permalink   Like   Dislike     Comment 94

David Losh says

San Francisco is a hub to Asia, that is where the money is.

we borrow from them ! not the other way around...

David Losh   Mon, 7 Jan 2013, 11:26am PST   Share   Quote   Permalink   Like   Dislike     Comment 95

thomaswong.1986 says

we borrow from them

The point is the Chinese are making smart purchases in areas that have a value to them.

David Losh   Mon, 7 Jan 2013, 11:28am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 96

thomaswong.1986 says

Its all a myth this RE and great school linkage.

It's not what you know, it's who you know. Those people don't have to be geniuses to have top drawer connections in the business world, or medicine.

thomaswong.1986   Mon, 7 Jan 2013, 11:31am PST   Share   Quote   Permalink   Like   Dislike     Comment 97

David Losh says

The point is the Chinese are making smart purchases in areas that have a value to them

then they are suckers.. and easy fall to any con.

there are far more better choices in Singapore to Australia.

they are foreign citizens, not protected by US laws, and their money and property can be confiscated.

thomaswong.1986   Mon, 7 Jan 2013, 11:44am PST   Share   Quote   Permalink   Like   Dislike     Comment 98

David Losh says

It's not what you know, it's who you know. Those people don't have to be geniuses to have top drawer connections in the business world, or medicine.

I am a grad of Fremont High School.. the so called Fortress.. and like many laugh as such
idiotic notion these schools are more desirable.. the parents are just nuts.

many of these parents are foreign to this region.. how many heard of Bellermine or Presentation.. but they are very much east of the Fortress.

David Losh   Mon, 7 Jan 2013, 12:23pm PST   Share   Quote   Permalink   Like   Dislike     Comment 99

thomaswong.1986 says

they are foreign citizens, not protected by US laws, and their money and property can be confiscated.

What? That must be news to the thousands of foriegners who own property here.

thomaswong.1986 says

idiotic notion these schools are more desirable

It's the same all over the world, it depends on the connections you made in that school. That's where a lot of parents get confused.

JFP   Mon, 7 Jan 2013, 12:38pm PST   Share   Quote   Permalink   Like   Dislike     Comment 100

thomaswong.1986 says

Its all a myth this RE and great school linkage.

Perhaps, it's better to say that schools perceived as being good are linked to higher real-estate prices.

bob2356   Mon, 7 Jan 2013, 1:01pm PST   Share   Quote   Permalink   Like   Dislike     Comment 101

thomaswong.1986 says

they are foreign citizens, not protected by US laws, and their money and property can be confiscated.

That's completely wrong. The only rights exclusively reserved for citizens are the right to vote and the right to run for office. All other parts of the constitution and amendments refer to persons or people with no distinction for citizens. The US is also a signatory to the Universal Declaration of Human rights which reaffirms this. In practice the US government ignores its own laws and it's international commitments on a regular basis. The rest of the world does take notice.

You are a us citizen and your money and property can be confiscated at any time. Weren't you aware of that?

thomaswong.1986   Mon, 7 Jan 2013, 3:36pm PST   Share   Quote   Permalink   Like   Dislike     Comment 102

David Losh says

What? That must be news to the thousands of foriegners who own property here.

LOL! this has already been contested as it related to Columbian drug smuggles (foreign citizens) back in the 70s and 80s as they bought up all RE and Cars. Later it was confiscated. Some others included Philippine President Marcos as he bought up US property and was handed over to the Philippine govt. Most recently we seized Qaddafi's assets in the US and most likely send it back to the new Libyan Govt.

thomaswong.1986   Mon, 7 Jan 2013, 3:38pm PST   Share   Quote   Permalink   Like   Dislike     Comment 103

bob2356 says

You are a us citizen and your money and property can be confiscated at any time. Weren't you aware of that?

Therefore a foreign citizens property cannot ? your contradicting yourself..

thomaswong.1986   Mon, 7 Jan 2013, 4:00pm PST   Share   Quote   Permalink   Like   Dislike     Comment 104

bob2356 says

That's completely wrong.

Do try to read and understand the constitution as it relates to foreign citizens "under the jurisdiction of foreign powers".

Peter P   Mon, 7 Jan 2013, 4:18pm PST   Share   Quote   Permalink   Like   Dislike     Comment 105

Properties can be held by US entities.

David Losh   Tue, 8 Jan 2013, 12:24am PST   Share   Quote   Permalink   Like   Dislike     Comment 106

thomaswong.1986 says

this has already been contested as it related to Columbian drug smuggles

A US citizen caught selling drugs can have all property confiscated as ill gotten gains.

You don't get to keep money you steal, or make with illegal activity.

lostand confused   Tue, 8 Jan 2013, 12:29am PST   Share   Quote   Permalink   Like   Dislike     Comment 107

David Losh says

A US citizen caught selling drugs can have all property confiscated as ill
gotten gains.

A US citizen trying to hire a prostitute can have his car seized in some jurisdictions. Of course it has nothing to with money for the local jurisdictions.

bob2356   Wed, 9 Jan 2013, 2:38am PST   Share   Quote   Permalink   Like   Dislike     Comment 108

thomaswong.1986 says

bob2356 says

You are a us citizen and your money and property can be confiscated at any time. Weren't you aware of that?

Therefore a foreign citizens property cannot ? your contradicting yourself..

You aren't very good at English are you? Where does it say a foreign citizens cannot? It doesn't matter who you are in the USA the government can seize your assets without due process of law or even having to tell you about it.

bob2356   Wed, 9 Jan 2013, 2:46am PST   Share   Quote   Permalink   Like   Dislike     Comment 109

thomaswong.1986 says

Do try to read and understand the constitution as it relates to foreign citizens "under the jurisdiction of foreign powers".

Could you supply the article that's from. My copy of the constitution is missing that part.

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