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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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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bmwman91's website
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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
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cloud13 says
Are you sure it isnt going to be in maybe Monaco ?
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Thomas the thing is they have all the relatives in North America , It's like a 2nd home to them- They won't go any place elese.
Also Okaay another thing i can tell you that most students who do MS, MBA here except IITians are sons and daughters of High ranked government officials and once they stable in their jobs for few years , Their dads would send them money and these prices are really peanuts for them considering the black money which is foating around in India.
Guess same must be true for chineese.
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First of all, any story that contains the term: " Snapping up" to me is immediately suspect. Secondly, where do these stories come from? Is it me or do stories of mysterious foreign buyers " Snapping up" real estate in the US crop up like clockwork every summer?
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"Snapping up" is sort of a funny term.
Besides, the Chinese have bought-out huge swaths of SF/Daly City, Point Richmond & Cupertino. I will be marrying one whose family has properties here. From what I can tell, they are wealthy & generally just like to have a house here. Their rental endeavors haven't seemed to be great investments, but it seems that a lot of them have enough money that they don't care anyway.
I don't think that there's too much concern to be warranted about foreigners buying up stuff in mid- to lower-end areas. For the wealthy foreigners, property here is as much a status-symbol as anything.
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cloud13 says
Where back home corruption is rampant... and billions swindled and money laundered to overseas bank accounts.
Odd how some damn US Bankers/Wall Street/Madoff and embrace with open arms thieves/swindlers who used fake names/passports and most likely denied they were members of the Communist Party.
This isnt going to last and they will be eventually sent back, and their homes liquidated.
When something is too good to be true, it usually is..
China's Great Swindle: How Public Officials Stole $120 Billion and Fled the Country
http://www.time.com/time/world/article/0,8599,2079756,00.html#ixzz1SZo8TyxG
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bmwman91 says
They were here long before 1990.. In Cupertino 1 out of 4 were Asian back then. This is all nonsense... next you will saying we will an area in SF called "ChinaTown".
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San Jose, CA
"Snapping up" is definitely true in Saratoga and Palo Alto Hills as far as Chinese high end buyers are concerned. I attend several open houses in these towns and to my knowledge several of them have been snapped up by "all cash" buyers from mainland China in the past 8 months that I have been looking there. As examples, here are the latest 2 properties that went off the market in the past few weeks (in my knowledge) to "Chinese cash buyers" - they were snapped up within 1-2 weeks of listing and according to the listing agents they got "all cash" offers from mainland china buyers.
http://www.redfin.com/CA/Saratoga/13434-Old-Oak-Way-95070/home/1742989
http://www.redfin.com/CA/Saratoga/13834-Upper-Hill-Dr-95070/home/909334
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cloud13 says
Because when someone makes a ridiculous claim, I call it out. People make all kinds of absurd claims like this. The German car thing -- if Chandigarh has more German cars, it's because Chandigarh has more than a million people and Los Gatos is a small foothill town of 30K people, not because people are more rich there. But it's a silly comparison and probably not even true despite that fact.
Again, not all land in Punjab is worth that. Only a limited amount of land is -- that which is coveted by the government of Punjab for special projects.
And on top of that, you're telling me cooks and nannies have village land that they can sell for that much per acre. Riiiiight.
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bayhousehunter says
BS on that first house. 13434 Old Oak Way was first listed on May 3 and went pending on July 12. The price was changed on June 25, so it didn't even go pending in less than 2 weeks after the price change. It has not sold yet.
13834 Upper Hill Dr went for below asking, although it did go pending quite quickly and sold quite quickly:
Jun 21, 2011 Sold (MLS) (Sold) $1,650,000
Jun 17, 2011 Sold (Public Records) $1,640,000
Jun 11, 2011 Pending (Pending (Do Not Show))
May 31, 2011 Listed (Active) $1,700,000
No idea if either buyer is from Mainland China. I doubt either you or the listing agent would know either.
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cloud13 says
Not true. I have met plenty of Indians with an MS or MBA degree here, and none of them have been sons or daughters of high-ranked government officials. You'd think if "most" are that I would have run across one.
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bayhousehunter says
New BS introduced by realtors. Loan problems from US banks? No problem we have got "all cash" offers from mainland China buyers. There are always exceptions but it is very hard to believe that all "all cash" offers are from mainland China buyers.
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corntrollio says
corntrollio, this is not BS. If you choose not to believe it, that is fine. I know what I know because I was interested in placing offers on these 2 properties and had lengthy discussions with both the listing agents and decided to walk away because of the "all cash China buyer" factor. Both the agents got back to me to let me know that the properties were "off market" within 1-2 weeks of either the listing or price reduction. If you look at Los Altos Hills or PA Hills area, there are several similar scenarios as I have looked, liked some houses and failed to make offers against "all cash buyers" - I am just one person looking there during weekends when I am not busy, but there might be others who know of more such cases.
I am looking forward to coming across anecdotes of bidding wars between "all cash overseas buyer" and "Facebook, Zynga buyer" in 2012 in these coveted pockets where I am sure I will still be house hunting in the next few years looking for a "good deal".
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Once again, I can't help but think that stories like these are totally bogus. I say this because all during the bubble this was one of many reasons used to explain the higher prices- because gosh darn dontcha' know them foreigner's are buyin' up all th' real estate with trunkloads of cash!
Again- totally bogus.
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This one was sold all-cash to a mainland Chinese, I know of the buyer through a friend.
http://www.redfin.com/homes-for-sale#!lat=37.31763403181407&long=-122.05972280685907&market=sanfrancisco&sf=&sold_within_days=365&uipt=1&v=6&zoomLevel=16
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bayhousehunter says
Except that you are objectively proven wrong with respect to the first house. It did not go pending in less than 2 weeks after its price change, and it was on the market for over a month before it went pending at all.
bayhousehunter says
Why don't we do that? All cash offers should close very very quickly, right? Let's look at just single-family homes, since that's typically what we're talking about:
http://www.julianalee.com/reinfo/sold-LA.htm
I see two houses that closed in 1 day (definitely all cash), one that closed in 4, 1 in 12, and 1 in 6. That's 5 out of 45. Of those 5, one sold below asking, one at asking, and 3 above asking.
What about PA?
http://www.julianalee.com/reinfo/sold-PA.htm
1 in 15 days, 1 in 19 days, 3 in 21 days. 5 out of 54, 4 of which are above asking, 1 below.
Everyone says stuff like this, no one can prove it.
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OO says
Sold well below asking and took 85 days to close (cash does not take 85 days to close -- this was on the market for almost 3 months):
40) 10346 Scenic Bl SFR Apr-06 $1,550,000 $1,399,000 $1,440,000 2729 9000 Jun-30 85 81114882
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corntrollio says
You keep posting these links to prove your point, yet your analysis is terrible. Your information does not provide enough detail to tell you which houses were not cash offers. If you further qualify it with the limitation of "selling within 2 weeks of list/change price," that's one thing. But in your post, you limited it to "cash offers" only, and from your data, you have no idea if all or only a few of those houses sold to cash offers.
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San Jose, CA
corntrollio says - "All cash offers should close very very quickly, right?"
Just trying to learn more about the closing process - Do contingencies, inspections etc take time for "all cash" offers or not? What if there was termite damage, water damage, discrepancies etc?
Is it right to say that all cash offers close "very very" quickly every single time?
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bayhousehunter says
All cash means no contingencies. Sometimes all cash also means that the person gets a mortgage but has cash-on-hand to cover the transaction. Sometimes it means the person takes out a mortgage after the transaction is complete. All cash should always close very quickly because there are no contingencies.
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ch_tah2 says
All cash means a quick closing. Why would a cash offer take 60 days to close?
I present data, and not just BS manipulated data you get from realtors. Everyone else presents rumor from used house salesmen trying to whip up the market. Whom should you believe?