patrick.net

To look at data, check last 1 or 3month sale records in 95129 or 95014.

You should include Palo Alto as well.

Recently there has been a glut of parachuting Chinese hot money coming into the Bay Area, and all they are buying are Palo Alto and Cupertino, for schools. These buyers are typically Chinese investors who have just cashed out of their very over-valued Shanghai or Beijing condo properties looking for a way to park their money overseas. Most of them will end up getting a green card for their kids, who will come here to pursue education.

desibaba says

To look at data, check last 1 or 3month sale records in 95129 or 95014.

You need to read this:

Hey guys, Tim Ellis from Redfin (and also Seattle Bubble) here.

Thanks for catching this.

We’ve dug into the jobs that generate these charts and figured out that the way we are calculating the list price per square foot has an error that affects the price we display on the chart for past dates. The current point is accurate, but the past points are being incorrectly adjusted downward, resulting in the upward tilt toward the end of all the charts.

We’re working on a fix, but at this point I can’t say for sure when it will be live.

Bottom line: Redfin ALWAYS shows spiking prices.

And my guess is they're not going to "fix" it, because it was and is that way by design.

http://patrick.net/?p=578859#comment-727523

MarkInSF says

And my guess is they’re not going to “fix” it, because it was and is that way by design.

http://patrick.net/?p=578859#comment-727523

they'll fix it. redfin is a good company.

they didn't have to admit there was any bug but they did.

Syphilis says

they’ll fix it. redfin is a good company.

they didn’t have to admit there was any bug but they did.

I like redfin too, as far as real estate pimps go, but I am a bit irritated that the problem still seems to exist. It's been a few weeks after all.

Sure, they didn't HAVE to admit anything, but their 'thing' is customer service, right?

OO says

there has been a glut of parachuting Chinese hot money coming into the Bay Area, and all they are buying are Palo Alto and Cupertino, for schools.

Not just those areas I would say East Bay as well. There are way more Chinese there than I ever imagined.

Syphilis says

MarkInSF says

And my guess is they’re not going to “fix” it, because it was and is that way by design.
http://patrick.net/?p=578859#comment-727523

they’ll fix it. redfin is a good company.
they didn’t have to admit there was any bug but they did.

Bug?

This is not rocket science. It's basic number crunching that any decent programmer could do in an afternoon.

terriDeaner says

Syphilis says

they’ll fix it. redfin is a good company.
they didn’t have to admit there was any bug but they did.

I like redfin too, as far as real estate pimps go, but I am a bit irritated that the problem still seems to exist. It’s been a few weeks after all.

typically there is a regularly scheduled maintenance window. once a month or every 2 months or every 3 months.

so unless the bug is catastrophic (meaning people can't use the website) they wait for the maintenance window to fix non-catastrophic bugs.

OO says

These buyers are typically Chinese investors who have just cashed out of their very over-valued Shanghai or Beijing condo properties looking for a way to park their money overseas.

Now how exectly are these Chinese investors laundering/smuggling money out of China ?
In China they shot people for lesser crimes..

And which bank is coverting Chinese Currency to USD. You dont walk over the border with tons of cash and expect some US bank to do it on a whim.
There are laws against that.

And no dont bother me with wire transfers, I manage the wires at work for our global operations and its equally painful and lots of red tape.

thomas.wong1986 says

Now how exectly are these Chinese investors laundering/smuggling money out of China ?

I would like to know this as well. I don't know, but I suspect there is some truth to it. I have a good friend who does interior design, and she did a big job early this year for a Shianghai couple that bought a condo in the upper floors of Rincon One in SF. They stuck around long enough to see the beginning of the week long installation of their custom $60K chandelier, then went back to China, expecting to return this Summer for a few weeks.

MarkInSF says

I would like to know this as well.

Given all the restrictions... if its too good to be true, then as they say.

I do know that in SF there are over 200 foreign consulates, and the diplomats working in SF do get lavish spending free from US taxes.
http://www.pacificcoasttravelinfo.com/californiaconsulates.asp

It is very easy. Trading companies, false overseas transactions, underground banks (I've used, superb reputation). If you are only converting $500K, then it is easy. Every Chinese citizen is allowed to convert and wire $50K USD worth every year. Find 10 relatives and friends, viola. If you want to do a million, then you will need a trading company to do that for you. But the whole thing is systematic, if you don't know how to do it, it is simply because you are not part of the system. People in China who are able to make and move big bucks are all a part of the system. I have used underground bank to move some money, instantaneous confirmation across the border.

It is not like Chinese are known to be law-abiding citizens you know.

OO says

It is not like Chinese are known to be law-abiding citizens you know.

China executed 1,781 people in three months

http://www.papillonsartpalace.com/chinaE.htm

In Guangdong and other provinces those said to be guilty of economic crimes, including tax and financial fraud, currency forgery and "disrupting the stock market", had been executed.

I have to hand it to them, the Chinese certainly do punishment properly.

If we wanted to adopt anything from their culture, that would at the top of my list. This country is way too lenient.

at least you can see why people are fleeing the country

>It is very easy. Trading companies, false overseas transactions, underground banks (I’ve used, superb reputation). If you are only converting $500K, then it is easy. Every Chinese citizen is allowed to convert and wire $50K USD worth every year. Find 10 relatives and friends, viola. If you want to do a million, then you will need a trading company to do that for you. But the whole thing is systematic, if you don’t know how to do it, it is simply because you are not part of the system. People in China who are able to make and move big bucks are all a part of the system. I have used underground bank to move some money, instantaneous confirmation across the border.

I believe this is a big part of how the money is changed...

China can execute 170K people in 3 months, so what? If you are "in the system", you just can get away with anything, that is a big part of Chinese culture. You think those who can amass millions of dollars in China do not belong to one inner circle or another? And the law applies to them? How naive. If you get caught in China, it is NOT because you break the law, it is because you stepped on the toes of those who are more important than you, it is because you allied with the wrong faction of the party.

There is a contemporary Chinese saying, law is made to be broken. Whoever that has ever did business in China will not cite official rules on anything as a proof that certain things cannot be done. If you cannot get around the official rules, you don't deserve to do business in China, and your lunch shall be eaten, simple as that.

OO says

There is a contemporary Chinese saying, law is made to be broken. Whoever that has ever did business in China will not cite official rules on anything as a proof that certain things cannot be done. If you cannot get around the official rules, you don’t deserve to do business in China, and your lunch shall be eaten, simple as that.

Ouch.

I think this is how business is done all over. I am a business person, myself, but have been a bit naive over the years.

It is sad how things work, but business is a dirty game.

And the life of the sweet man is even worse: solitary, poore, nasty, brutish, and short.

Sean

OO says

You should include Palo Alto as well.
Recently there has been a glut of parachuting Chinese hot money coming into the Bay Area, and all they are buying are Palo Alto and Cupertino, for schools. These buyers are typically Chinese investors who have just cashed out of their very over-valued Shanghai or Beijing condo properties looking for a way to park their money overseas. Most of them will end up getting a green card for their kids, who will come here to pursue education.

http://faq.visapro.com/EB5-Green-Card-FAQ2.asp
"Create full-time employment for not fewer than ten qualified individuals; "

I suspect if real estate purchase will qualify to get EB-5 green card. But then, if these things are happening, they must have found ways to funnel money in to the system and US. That's unfortunate - it's almost smells like money laundering...bordering illegal, activity in this activity.

OO says

You should include Palo Alto as well.
Recently there has been a glut of parachuting Chinese hot money coming into the Bay Area, and all they are buying are Palo Alto and Cupertino, for schools. These buyers are typically Chinese investors who have just cashed out of their very over-valued Shanghai or Beijing condo properties looking for a way to park their money overseas. Most of them will end up getting a green card for their kids, who will come here to pursue education.

http://faq.visapro.com/EB5-Green-Card-FAQ2.asp
"Create full-time employment for not fewer than ten qualified individuals; "

I suspect if real estate purchase will qualify to get EB-5 green card. But then, if these things are happening, they must have found ways to funnel money in to the system and US. That's unfortunate - it's almost smells like money laundering...bordering illegal, activity in this activity.

China is like a Casino. It is easy to get rich, but can also lose everything overnight.
Lots people think that they are in the "system". Then get "executed" next day.

desibaba ......More and more people are lookig away from cupertino becuase it's too hot for them to handle. I stayed away from cupertino becuase to me it's a grade ghetto full of chinidans. I wanted to live in a more diverse neighbourhood.

It's painful to see why people don't realize this ? Their kids cannot be just living in Cupertino for ever, who knows where they would go for employment ? So giving them richer experience would help

There are many other ways than EB-5.

I was once working in China helping some American businesses set up joint venture/ subsidiary there. The key officials in China got to decide all the rules, the tax holidays, the form of investment (cash vs. equipment), the valuation etc. So to make sure that the American side will make money, there are lots of things one must engage in. And I assure you this is all legal and clean on the table...

Let's take a hypothetical example. The only son of this key official will come to the US for undergrad study. He won't have enough money to show as financial support. It just so happens that this American business that is doing business with his dad has a scholarship freshly set up for Chinese nationals. It also just so happens that the criteria for this scholarship fits the kid just like a custom-made glove, and the set-up of the scholarship, the admin side of it is completely handled by an outside consulting committee which cannot be traced back to the American business. So, the son happily comes to the US on a full scholarship plus a generous stipend money. Now, the son graduates. It just so happens that a subsidiary of this American business is looking for fresh grad, and is more than willing to sponsor green card. It also just so happens that this son possesses all the skills and particulars this position is looking for.

The real life example that everybody knows is the son of the Chinese ambassador to the US. He went to UPenn undergrad on a full scholarship that "happens to be" sponsored by a prominent Chinese business person who can use his dad's influence just a bit.

There are so many variations of how a connected person from China can obtain permanent residency here. EB-5 is really for someone who has no better connections in either country.

@OO

Thanks for the above comment. I wonder if this case is fairly common then.

AIJ,

this particular hypothetical case is quite common among a certain circle. There are many more lighter versions of this happening every day.

Back to the topic of moving money in and out of China, it is a lot simpler and easier than people think. Just think about 30,000 of Chinese students pursuing undergrad studies here, over 90% of them with absolutely no scholarship nor permission to work. All their tuition is legally exchanged and wired out. They are on international tuition so we are talking about $40K tuition + room and board per year. And you think an average Chinese family can pony up ~$200K for their kid's college fee?

OO says

How naive. If you get caught in China, it is NOT because you break the law, it is because you stepped on the toes of those who are more important than you, it is because you allied with the wrong faction of the party.
There is a contemporary Chinese saying, law is made to be broken. Whoever that has ever did business in China will not cite official rules on anything as a proof that certain things cannot be done. If you cannot get around the official rules, you don’t deserve to do business in China, and your lunch shall be eaten, simple as that.

LOL! With that kind of business philosophy, i will be sure to expect the next Tong-Mafia to rise up in Cupertino.

OO says

All their tuition is legally exchanged and wired out.

Wrong, US Universities, allocate free tuition for International students for the sake of "diversity'.

If your a US citizen, you dont get these handouts. Tought luck kiddo, have a Coke and a smile.

OO says

And you think an average Chinese family can pony up ~$200K for their kid’s college fee?

Costs passed to native students and sometimes US taxpayers. UCB gets 30% funding from state.

Thomas,

you are wrong about the free tuition for international students for UNDERgraduate studies. Most international students pursuing college-level education do not get free tuition, in fact they have to pay a higher International Tuition, just go to any state university website and look for the difference between international tuition fee and in-state fee. International students are a key revenue source for most US universities now.

US students at least get grants and financial aid, which are all off limits to international students. Check your facts before you bark.

Don't worry, there will be Tong-Mafia rising up throughout the Silicon Valley, whether you like it or not.

all those fairytale stories with no way to verify. One ambassador's son in Pennsylvania does not drive up prices all the way in Cupertino. Why Crapertino when the same ill gotten cash can get you a lavish mansion somewhere else? or much better education in London, NY, or MA?

Children of ambassadors and tycoons don't need to go to crappy public high schools in Crapertino when they can get into a world renowned private school like Phillips Academy, Trinity School, or Horace Mann (all in the east coast). Even if they buy houses, they would not be slumming it with the commoners, They would be living in mansions in Atherton, Beverly Hills etc.

Actually out of all of the top 20 private prep schools, only 2 are in CA (1 in so Cal and 1 in Oakland) all the rest are in NY, MA, and New England.

Serpent,

Could be.

How do you explain the outward appearances of affluence in The Fortress?

Heck, I even noticed it a couple of months ago. I found myself over there during a time of the week when I normally do my grocery shopping so I stopped at the Trader Joe on Bollinger (in "San Jose" but only a technicality; it was in The Cupertino Schools "Fortress"). The price for the organic whole chicken was a lot more than what I usually pay at the Coleman Avenue location in San Jose.

Cupertino prices!

Interesting comment about wealthy Chinese investors and real estate prices. This would explain why Palo Alto (aka: Shallow Alto), Cupertino, Los Gatos, and Saratoga are hideously overpriced compared to the rest of the country. For me, I would rather work hard for 5-10 years, save and bank a million dollars into gold, silver and other asset classes and then retire at 45-50 overseas in Thailand or South America and live like a king! Of course, I also do not have kids or an expensive wife to worry about. California is WAY overpriced.

sybrib says

Serpent,
Could be.
How do you explain the outward appearances of affluence in The Fortress?
Heck, I even noticed it a couple of months ago. I found myself over there during a time of the week when I normally do my grocery shopping so I stopped at the Trader Joe on Bollinger (in “San Jose” but only a technicality; it was in The Cupertino Schools “Fortress”). The price for the organic whole chicken was a lot more than what I usually pay at the Coleman Avenue location in San Jose.
Cupertino prices!

Sigh... you seem to have selective amnesia, we've been over this many times
Really? price of organic chicken costing more in Cupertino as proof that rich aliens are fueling the fortress prices? You've gotta be kidding me. Trader Joe's don't set prices based on the source of money of their customers. They set prices base on the market and costs.

Why do people who livie in the fortress appear rich? because they make more money? people who have lived in the Fortress areas before prices exploded are enjoying low property taxes and low rates for HELOC. of course there are people who legitimately made fortunes in the Silicon valley, others feel the need to "keep up with the Joneses", early immigrants saved and lived frugal lives so that their kids can drive flashy cars and eat Sushi at Blowfish... etc etc.

its pretty easy to rack up debt to buy thousand dollar purses, party at Santana Row, and go on exotic vacations, even on a Vietnamese coffee shop hostess pay. its not hard to look and live rich with easy credit... how did we get here?

are there people here who smuggled money from China? possibly a handful, but driving up prices in fortress areas? No friggin way.

sybrib says

Serpent,
Could be.
How do you explain the outward appearances of affluence in The Fortress?

conspicuous consumption is not the same as wealth.

SJ says

Interesting comment about wealthy Chinese investors and real estate prices. This would explain why Palo Alto (aka: Shallow Alto), Cupertino, Los Gatos, and Saratoga are hideously overpriced compared to the rest of the country.

Started some 12 years ago with stock options from high flying IPO prices, once that dried up, over 100 SV public companies used back dating of options. After that you saw easy toxic loans boom to over half of home purchases. Go back before 1998, it was rather inexpensive without the enabler gone amok. It was pretty much reported back inthe papers how one buyer overbid by 100% back in the day. Like drunken sailors, didnt matter, there was plenty more options to cash out, or that is what they thought.

Fall Real Estate 2000
Publication Date: Wednesday, Sept. 20, 2000 & Friday, Sept. 22, 2000

http://www.paloaltoonline.com/news_features/real_estate/fall2000/2000_09_22.lowmarkt.php

SF ace says

Observations about Cupertino and why the market is so strong.

Where was this madness pre-1998 for decades past ? We didnt see this kind of madness over RE. And when cities like Cupertino were booming in the 80s-90s, for all the right reasons, prices nudged a little higher, but never to the extent we seen in the past 10-12 years.

Cupertino schools any different vs back then, or just another hyped up realtor selling point?

thomas.wong1986 says

Cupertino schools any different vs back then, or just another hyped up realtor selling point?

Real quick search - yes
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2000/10/04/SantaClaraCupertinoUnionElemCupertinoMiddle.txt
840 in 1999
http://www.school-ratings.com/schoolRatings.php?schName=cupertino
916 2009

You have to admit Cupertino has changed a lot in the past 10 years, maybe more. Whether they have the money to support prices is debatable, but you cannot argue that Cupertino has become more Asian.

ch_tah says

You have to admit Cupertino has changed a lot in the past 10 years, maybe more.

More Asians today vs back than, is that what your saying ?

Are you gonna compare the students (the dumb nut white rednecks like me) from decades past who went into the workforce and built Silicon Valley, created new industries, new jobs and the tech revolution to who exactly ? Are they gonna be better and smarter and exceed accomplishments of the prior generation?

Repeat after me, chindians don't have magic fortune telling powers, they dont have gold egg laying dragons, they dont have unlimited commie money (lol), they dont make perfect financial decisions, they are not immune to the lies of realtors.

thomas.wong1986 says

More Asians today vs back than, is that what your saying ?

Are you gonna compare the students (the dumb nut white rednecks like me) from decades past who went into the workforce and built Silicon Valley, created new industries, new jobs and the tech revolution to who exactly ? Are they gonna be better and smarter and exceed accomplishments of the prior generation?

More Asians - Yes.

You asked the stupid question if schools are any different now compared to then. The answer by statistics (which everyone on this board loves when it proves their point - including you) is that Cupertino students get better scores now than they did then.

Better, smarter, exceed accomplishments - smarter (as described above, yes); exceed accomplishments, maybe.

Hopefully, their arguing skills will be better than past generations.