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Foreign investors snapping up choice Silicon Valley property


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2011 Jul 17, 1:39pm   16,414 views  60 comments

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http://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.

#housing

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39   corntrollio   2011 Jul 19, 6:47am  

bayhousehunter says

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?

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.

40   corntrollio   2011 Jul 19, 6:48am  

ch_tah2 says

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.

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?

41   ch_tah2   2011 Jul 19, 7:01am  

corntrollio says

All cash means a quick closing. Why would a cash offer take 60 days to close?

You only have DOM in your data. You don't have the date that the house went pending. Therefore, you have no idea how many days these sales take to close. You have incomplete data and are doing exactly what you are complaining about, spreading mere rumors with no basis of fact.

Again, if you want to limit your statement that the data does not show many "cash offers within 2 weeks of listing" or "cash offers above asking" then you are correct. But every single house on your lists could be a cash offer for all you know.

42   corntrollio   2011 Jul 19, 8:26am  

ch_tah2 says

Again, if you want to limit your statement that the data does not show many "cash offers within 2 weeks of listing" or "cash offers above asking" then you are correct. But every single house on your lists could be a cash offer for all you know.

Look again at the original claim by bayhousehunter:

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.

The original statement said within 1-2 weeks. If I went through the almost 100 houses, I'm sure I could find out quite quickly when all these houses went pending. So could you.

Again, the difference is that I'm giving raw data that anyone can look at and I'm being fully transparent. Anyone can go on MLS, Redfin, Zillow, Trulia, and look these houses up to figure out when they went pending. Compare that to the typical used house salesman who lies through their teeth about everything and thrives on rumor and innuendo.

43   ch_tah2   2011 Jul 19, 8:39am  

Yes, I know what the original statement by bayhousehunter was. He was talking about 2 specific houses and several that occurred in LA and PA, not the whole market.

Look at your statements. You clearly say 5 are cash of 45 in LA and 5 out of 54 in PA. You cannot fairly say that without conditional language. Your raw data is fine; your additional comments are pure speculation. We went through this before; stop misinforming people by suggesting that DOM is equivalent to the time to close.

corntrollio 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.

44   corntrollio   2011 Jul 19, 8:51am  

ch_tah2 says

Look at your statements. You clearly say 5 are cash of 45 in LA and 5 out of 54 in PA. You cannot fairly say that without conditional language. Your raw data is fine; your additional comments are pure speculation. We went through this before; stop misinforming people by suggesting that DOM is equivalent to the time to close.

Whenever someone says the majority of houses are being sold in 1-2 weeks and they are closing all cash, it's easy to look at DOM to show they are wrong. Again, look at the original claim. You conceded in a prior thread that DOM was a good proxy for figuring out if something sold within a week of listing and for all cash. We're extending by a week here.

Moreover, I invite EVERYONE who claims a house sold within a week or even two weeks and for all cash to post the address here on Patrick.net so everyone can evaluate based on available data, rather than relying on rumor.

45   ch_tah2   2011 Jul 19, 8:55am  

As an example of how your data provides the partial story,
http://www.redfin.com/CA/Los-Altos/1420-Miravalle-Ave-94024/home/23471484
says DOM 208 on your julianalee website. (as a side question - isn't she a used house salesperson - why is her data necessarily valid?)
Now using your logic, that's clearly not a cash purchase because DOM is greater than ~20.
Yet, when you look at redfin, you see it went pending on June 21, 2011 and was sold June 27, 2011 - 6 days to close.
So it was clearly a cash purchase.

46   ch_tah2   2011 Jul 19, 8:59am  

corntrollio says

majority of houses are being sold in 1-2 weeks and they are closing all cash

Your argument would be correct if someone said that. I don't see anyone saying that above.

corntrollio says

You conceded in a prior thread that DOM was a good proxy for figuring out if something sold within a week of listing and for all cash. We're extending by a week here.

Yes, when you put a time constraint on it, DOM can be used. I think I've made that pretty clear in every post on this thread. For some reason, you won't just say that. And my example above shows how wrong your analysis can be when using only DOM without a time constraint.

47   Clara   2011 Jul 19, 9:03am  

Inflation in USD makes foreigners have more purchasing power. We are screwed.

48   corntrollio   2011 Jul 19, 9:44am  

ch_tah2 says

Your argument would be correct if someone said that. I don't see anyone saying that above.

Again, I implore you to look at the original quote. It says 1-2 weeks. You have to read my response in context. I have shown this multiple times whenever someone insists on fast sale + all cash -- there are only a limited number of candidates for which those claims could be true, but it's not guaranteed because MLS data isn't perfect. I don't know why you're beating this to death.

(as a side question - isn't she a used house salesperson - why is her data necessarily valid?)

She is providing data, not rumor. She should be commended for that, rather than acting like the herd of useless realtors.

ch_tah2 says

As an example of how your data provides the partial story,
http://www.redfin.com/CA/Los-Altos/1420-Miravalle-Ave-94024/home/23471484
says DOM 208 on your julianalee website. (as a side question - isn't she a used house salesperson - why is her data necessarily valid?)
Now using your logic, that's clearly not a cash purchase because DOM is greater than ~20.
Yet, when you look at redfin, you see it went pending on June 21, 2011 and was sold June 27, 2011 - 6 days to close.
So it was clearly a cash purchase.

No, that's an example of how my data helps elucidate the story. Look at the history -- this did not sell for "over asking" or "within a week or two of listing" and it sold at almost a $300K discount. It took 6+ months. I don't see anyone on Patrick.net telling me about this house:

Jun 27, 2011 Sold (MLS) (Sold) $2,400,000
Jun 21, 2011 Pending (Pending (Do Not Show))
Jun 15, 2011 Relisted (Active)
Jun 15, 2011 Pending (Pending Without Release)
Apr 27, 2011 Price Changed $2,495,000
Mar 22, 2011 Price Changed $2,645,000
Dec 02, 2010 Listed (Active) $2,695,000

I will note that it might even be a 12 day escrow, because that drop out of escrow and back in could have been the same person, although that still suggests cash.

Another good use of data:You can also see that while 1396 Pritchett was a *candidate* for being all cash and sold within 2 weeks, that's not the whole story.

28) 1396 Pritchett Ct SFR Jun-06 $1,800,000 $1,800,000 $1,782,500 2876 11880 Jun-07 1 81125343

1 day escrow. However, you can see the agent notes that say pre-emptive sale, comp purposes only:

http://www.redfin.com/CA/Los-Altos/1396-Pritchett-Ct-94024/home/1488045

This house was never on market, and the used house salesman only put it on MLS as a data point. There is no indication of escrow or anything else. Again, I'm not saying low DOM is a *sufficient* criterion to determine all cash + within 2 weeks, but rather that it's a *necessary* criterion. In the above examples, it means *at most* 5 houses could have been all cash and sold within 2 weeks.

By the way, ditto for 803 Mora Dr -- 1 day escrow for comp purposes only, and it had actually been listed since May 2009, but it wasn't listed on MLS at the time of the sale:

http://www.redfin.com/CA/Los-Altos/803-Mora-Dr-94024/home/1087925

It also sold for $2.483M, not $2.5M -- a limitation of MLS here. This was a candidate, doesn't meet the standard.

427 Paco Dr is also suspect. It had been listed back in 2009 and could have been an off-market sale that was listed on MLS just for comps. It only has one picture, so it was probably not a bona fide listing this June. Again, was a candidate, but was probably not all cash within a week or two.
http://www.redfin.com/CA/Los-Altos/427-Paco-Dr-94024/home/1527782

49   ch_tah2   2011 Jul 19, 9:49am  

corntrollio says

Again, I implore you to look at the original quote. It says 1-2 weeks.

Yes, and he also said 2 houses, not "majority."

edited:

You can use my redfin example how you choose. Whether a house sells above or below list has nothing to do with my point. What the example clearly shows is that looking at DOM tells you little in terms of cash offer or not. I'm glad you finally revised your message to include a time factor.

50   corntrollio   2011 Jul 19, 9:52am  

ch_tah2 says

I'm glad you finally revised your message.

No revision. Just look at prior posts on Patnet. Entirely consistent with what I said before. We had this argument before and you're still fighting. Anyone else is free to check out the prior thread where ch_tah conceded: http://patrick.net/?p=822028#comment-745439

ch_tah2 says

Yes, and he also said 2 houses, not "majority."

Yeah, and he was dead wrong about one of the houses. I nonetheless commend him for pointing at 2 specific houses even though he followed rumor.

51   B.A.C.A.H.   2011 Jul 19, 11:07am  

thomas.wong1986 says

cloud13 says

are sons and daughters of High ranked government officials and once they stable in their jobs for few years

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

I don't think so.

Our country is full of the elites who bought their way with their ill-gotten gains into the USA as the dictatorships they cronied with crumbled... Iranian elites in L.A., Bautista- and Somoza Crony elites in South Florida, Marcos Cronies here and there in California and Hawaii, etc. They did not have their properties here liquidated and did not get sent back.

52   B.A.C.A.H.   2011 Jul 19, 11:17am  

corntrollio says

OO says

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

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

Controllio, three months is not a long time to sell a very expensive home. And selling below "asking" price, it is still very expensive. You are proving OO's point.

I don't have anything at all to gain, not even saving face, by what is happening in The Fortresses along the West Coast. But wishing it were not so is not going to make it not so. It is what it is. Lotsa the money spent at places like WalMart is getting repatriated into Left Coast Fortress Real Estate, for the time being while the Communists can still keep a lid on things. Like the Iranian Elites who were resettling in the L.A. area in the 1970's.

53   thomas.wong1986   2011 Jul 19, 11:30am  

Sybrib says

Marcos Cronies here and there in California and Hawaii, etc. They did not have their properties here liquidated and did not get sent back

As you will recall Marcos homes and wealth were confiscated and sold at auction. Funds sent back to the Philippine government. There is a legal precedent for this.

Feb 11, 1991 - NEW YORK -- The Crown Building, a Fifth Avenue landmark once owned by Ferdinand and Imelda Marcos, has been sold at auction after five years of court battles, international intrigue and deal-making. But the price will mean little profit for the Philippine government because the winning ...

Dec 24, 1993 - The Philippine government plans to try again to sell the Beverly Hills Calif., mansion once owned by Imelda Marcos. The government first tried to auction off the mansion in 1991 but found no takers at a base price of of the Presidential Commission on Good Government in Manila said ...

http://articles.latimes.com/1988-10-12/news/mn-3268_1_imelda-marcos

54   corntrollio   2011 Jul 19, 11:31am  

Sybrib says

Controllio, three months is not a long time to sell a very expensive home. And selling below "asking" price, it is still very expensive. You are proving OO's point.

OO hasn't proven his/her point to any reasonable standard. I never said 3 months is not a long time, but rather that it's longer than 1-2 weeks.

I'm not sure what you're talking about with all the fortress talk. Honestly, you just keep repeating the same thing over and over without really saying anything of substance.

55   thomas.wong1986   2011 Jul 19, 11:36am  

Sybrib says

Like the Iranian Elites who were resettling in the L.A. area in the 1970's

You mean when Jimmy Charter shipped the rich Iranian Elite students with deep pockets back to Iran. Are those the ones?

56   corntrollio   2011 Jul 19, 11:47am  

thomas.wong1986 says

You mean when Jimmy Charter shipped the rich Iranian Elite students with deep pockets back to Iran. Are those the ones?

There may have been some Iranians shipped back, but Los Angeles has a large concentration of Iranians, particularly of Jews from Iran. A substantial portion of the Iranian Jewish population emigrated after the revolution, and a lot of them landed in LA. Some of my Iranian (or Persian, as they generally say) friends refer to it as Tehrangeles or refer to Westwood or parts of West LA as Little Tehran.

57   B.A.C.A.H.   2011 Jul 19, 11:48am  

Controllio, its "Fortress", okay? If you don't read between the lines well that's OK, maybe we can discuss it at City Lights Expresso some time. And, I used to drink expresso before it was Hip to do so. But I don't drink Cool Aid.

58   thomas.wong1986   2011 Jul 19, 11:56am  

Yes, just some here and there...

Most Americans Keep Calm About Iranian

Situation .news.google.com/newspapers?id=4lFCAAAAIBAJ ...

Nov 15, 1979 - Deport! "at a rally demanding action against the more than 40000 Iranian students living in the United States. The International Longshoremen's and Warehouse men's Union called on its members to refuse handle cargo from Iran or service Iranian ships along the West Coast and in Hawaii. ...

59   ch_tah2   2011 Jul 20, 1:38am  

corntrollio says

No revision. Just look at prior posts on Patnet. Entirely consistent with what I said before. We had this argument before and you're still fighting.

If you would just stop trying to push your BS that you can tell how many houses were cash purchases from DOM, there wouldn't be an argument. You finally admitted it again, but it took some teeth pulling.

corntrollio says

Anyone else is free to check out the prior thread where ch_tah conceded: http://patrick.net/?p=822028#comment-745439

Which concession are you talking about - the one where I was nice and called it a misunderstanding to let you save face after you completely backpedaled from saying DOM tells you how many cash offers there were, or the one where I agreed with you that DOM is not enough information to determine whether a purchase is cash or not?

The only one who has definitely made up stuff on this thread is you where you were fighting some fictional opponent who claimed "a majority" of sales were all cash. No one ever said that. At most you have someone who said 2 sales were all cash, and then you presented data of 10 all cash sales. I understand you want to do whatever you can to convince people that there isn't enough money in the bay area to support prices but let's stick to facts, please. There's enough BS for people to wade through coming from real estate agents; no need for you to stoop to their level.

60   corntrollio   2011 Jul 20, 6:02am  

ch_tah2 says

The only one who has definitely made up stuff on this thread is you where you were fighting some fictional opponent who claimed "a majority" of sales were all cash.

Riiiight. Because "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." means that there are only two. Five candidates among 45-55 sales for each city, for one of which you can toss out 2 off the bat, is not really a good way to show that all cash sales within 2 weeks are prevalent. It just means that you went to a highly competitive house and someone beat you to it. There are plenty of houses with much higher DOM.

The record is clear, and it's all up there in context. If you can't accept that, it's your problem.

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