Watchhttp://www.mercurynews.com/top-stories/ci_18495547
Interesting paragraphs cited below:
Foreign buyers are contributing to the large number of absentee purchases in the current South Bay housing market. Absentee buyers, which can include investors who don't intend to live in the house, accounted for nearly 15 percent of all sales in Santa Clara and San Mateo counties in June, according to DataQuick, the real estate information service.
Michael Riese, a realtor with Alain Pinel in Los Gatos, described two types of foreign buyers in the valley these days: One has a purely business mentality, seeking a short- or long-term investment. Another is the newly hired tech executive, "coming from places with bigger problems than we have, seeing a home purchase in the U.S. as a solid investment, compared with what they may otherwise put their cash in back home."
Charmaine Wang, the first agent in Shanghai for the Bay Area's Intero Real Estate Services, estimates that "hundreds" of mainland Chinese bought property in Santa Clara County within the past year. They're buying "in all the high-end neighborhoods -- Palo Alto, Los Altos Hills, Atherton," she said.
The buyers are "very private people," she said. Property records won't reflect the offshore ownership, and they are unlikely to share their stories publicly.
Trulia, the online real estate information service, reports a big jump in searches for Silicon Valley real estate from other countries. Searches for property in Cupertino were up 90 percent in the first quarter of this year from a year earlier, Trulia reported. Palo Alto was up 121 percent; Los Altos Hills up 182 percent; Atherton up 68 percent and San Jose up 86 percent.
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Incidentally I just went to a housewarming party in Atherton last week, an entry-level $1.8m home, bought by a Chinese couple working in the Silicon Valley with help from parents. One of them just graduated from college.
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San Jose, CA
My take is as long as the real estate bubble has not
popped in China, it will keep inflating or maintaining
the high price for the housing market in places like
Vancouver and California.
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Yep.
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same with Indian too.......An acre of land in Punjab is selling for 200K, Can you imagine if the guy has 40 of those and is in silicon valley
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Nobody says
You could have said the same about the Japanese back in 1989,
and how did that end up ? Did it stop prices from falling in the USA ?
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San Jose, CA
Mr. Wong,
You tell me the answer. We all know is that there are
many Chinese inflating the price of housing.
I am assuming once the housing market in China is
popped, it will take our housing market with it. Is that
what happened back in 1989?
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How lovely, rich immigrants buy up all the housing, while many bay area born US adults cannot even afford to rent where they were raised. Outlaw RE ownership by non Americans
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Mountain View, CA
bmwman91's website
Premium
How long will these foreign speculators/investors hold on to these properties when prices drop? How about if prices in the higher-end area remain stagnant for the next decade?
Certainly, these investors are going to find themselves losing money on taxes & maintenance if (best case) prices stagnate for along time. I guess we'll see just how savvy these "investors" are when it comes to basic book-keeping. Based upon what I have seen of people here in the last decade, basic bookkeeping is a skill most self-titled "investors" lack.
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Well, can't say about India, but for China, this is more than investing, and very different from the Japanese.
The Japanese buying overseas treated these properties as investment and vacation properties, they never intend (or rarely do so) to immigrate to the US. Not so for the Chinese.
I have tons of friends in China literally mining gold every day, but they lack long term confidence in China. You have no idea how many friends have asked me to help their wives drop a kid or two in the US so that the babies will have American citizenship. Their long term plan is to make as much as possible from China while the party lasts and retire in the US. For Chinese, their property buying here is an integral part of an exit package - somewhere to flee to just in case China blows up again, like 70 years ago.
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OO says
i.e. I have no proof, and I'm saying that you can't prove it either. BS. Property records will reflect *some* ownership, and you can piece it together from there.
Everyone always says this crap for every bubble and bust period. Most foreign buyers are good at overpaying, and not much else, and there are many fewer than everyone makes it out to be.
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cloud13 says
I doubt ALL land in Punjab is worth anything close to that amount. You're probably talking about certain acreage that is near projects run by the government of Punjab. So maybe there are a lucky few, but these people aren't Silicon Valley-types. They are farmers and don't have 40 of them.
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Here is the raw data. You should draw your own conclusions instead of listening to used house salesmen:
http://www.julianalee.com/reinfo/monthly.shtml
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Denver, CO
Yawn.
This is one of the standard sub-stages of the stage of denial during a market collapse: "Foreign cash buyers will save us!"
Heard this in the early 1990s: I don't believe that turned out well.
To quote Irvine Renter at IHB: "It's a myth that foreign cash buyers are smart money that purchases bargains. FCBs are generally dumb money that overpays for declining assets."
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Any investment in current US markets is a recipe for disaster.
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San Jose, CA
Wa? Chinese don't treat the real estate like
investment? Give me a break. Chinese are
notorious for doing exactly that.
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Nobody says
Why don't you say US bubble was caused by Chinese and NOT by US banks,realtors,government,etc. :)
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HydroCabron says
They won't save "us", but they will keep scooping up residences they covet in The Fortresses along the Left Coast, like those articles that recently appeared about Vancouver.
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Sybrib says
palo alto prices are down from the peak.
i wonder why that is if there really are so many foreign buyers .
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San Jose, CA
Hysteresis,
Are you telling me foreign buyers are getting picky?
How dare they.
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corntrollio says
you seem like an Indian....
How do you know ? There are more Audis , beamers and mercedes in Ludhaina and Chandigarh then i see here in San Jose/Los Gatos/Campbell.... and do you know even the Household cooks and nannies from Punjab have few acres back home. Sooner or later they will offload that and ofcourse buy here