An article discussing the Chinese demand in San Francisco, which has also been seen in other desirable areas of California:
MATIER: What is driving the capital here … what’s [causing] people from China to invest this kind of money in San Francisco?
McLAUGHLIN: I think we’re seeing three different phenomena. One is asset diversification, people trying to move money out of China. Two would be education for their families. And three would be lifestyle, this is a beautiful place to live.
MATIER: Are they actually living here or are they just buying houses here the way we might be puttting money in a safety deposit box — it would be safe here, it’s free from any government moves in China and the value would be appreciating?
McLAUGHLIN: It’s difficult to generalize on that but I’d say that probably fifty percent of them are living here. Whether they’re living here to get their education or whether they’re living here for a change in lifestyle.
MATIER: And they’re able to amass this much cash in China, get it to Hong Kong and get it to San Francisco before [other] people can get their loan papers in?
McLAUGHLIN: Well, yeah. A lot of all-cash. We’ve seen tremendous wealth created in China in the last 20 years through the diversification of their government into private industry. At Pacific Union we’re seeing an awful lot of that capital generated put into [the] purchase [of] homes here in the San Francisco Bay Area.
MATIER: And how has it affected the market?
McLAUGHLIN: Well, in certain areas like Silicon Valley — Palo Alto, Menlo Park and the city of San Francisco — it’s added a demographic of buyers who, generally, take a long-term view. They’re not sellers in the next five to seven years. So it is going to drive housing prices up.
NAR’s ranking of the cities that international buyers are considering:
http://www.realtor.org/articles/where-are-global-buyers-searching-in-the-united-states
Interesting that L.A. is number 1, but not hard to believe.
A lot of that L.A. searching spills into Riverside and Irvine as well especially the second generation crowd.
I also find it hilarious when people say L.A. is dying LOL. I sure seems to be growing to me.
Seriously, Detroit??????