A pair of married software engineers hooked up with real estate agent Tim Gullicksen about six months ago in pursuit of their dream home.
After taking time to peruse the market, the couple found a multimillion-dollar single-family home in San Francisco that they loved. In January, they wrote an offer letter to the seller, complete with an attached photo of the young family, and squared away their finances.
In early February, the couple told Gullicksen they would no longer place a bid. They planned to take a three-week vacation in their native country of India, and decided they couldn’t risk buying a house if President Donald Trump’s administration wouldn’t let them back into the US. (While no such restriction exists, they worry the new administration might change its mind.) They declined to speak with Business Insider directly for fear of retribution from the government.
San Francisco is one of the most competitive housing markets in the US, with a median listing price that tops $1.1 million. But foreign-born tech workers, who often commute to Silicon Valley, are starting to back out of buying property because they worry about an escalating crackdown on immigration under Trump, according to some real estate agents.
More than 100,000 visas have been revoked since an executive order issued on January 27 temporarily banned citizens of seven majority-Muslim countries from entering the US. Real estate agents in the Bay Area tell Business Insider they started to hear rumblings among prospective buyers in late January, after Trump signed off on the immigration ban. The topic came up in company meetings, private emails, and closed groups for realtors on Facebook.
Nina Hatvany, a luxury realtor with Pacific Union International, sold more houses in terms of sales volume — $216 million — than any other agent in San Francisco last year. Hatvany tells Business Insider she frequently takes on clients who originated outside the US.
“I often have conversations, ‘Is this a good place to put my money?’ Absent earthquakes, it is,” Hatvany says. “[The San Francisco Bay Area] has certainly shown tremendous appreciation, and it’s a wonderful place to live. …If people start to worry about whether they’re going to be able to get into the country when they come home from vacation, that could change.”
Dylan Hunter, a real estate agent with Pacific Union International, said he hasn’t had a client “pull the red cord” yet, but he knows immigration reform is a concern for some. He’s working with a couple based in San Francisco — one is an investment banker, the other works at Google — who are in the market for a $2 million single-family home. Their relatives in India are worried the couple will never be able to visit, and vice versa.
Google’s CEO Sundar Pichai issued a company-wide memo last month urging staff traveling overseas to return immediately. He said 100 employees are affected by the executive order.
One ripple effect of the Trump administration’s policies might be a downturn in the Bay Area’s housing market. Karen Yang, a real estate agent with Fling Yang & Associates, says that if H-1B visa holders (a type of visa that allows US companies to bring in foreign professionals with specialized skills) disappear from the marketplace, a sudden lack of competition could drive down the price of a single-family home in the city.
Most real estate agents we spoke with, however, said their clients should not be directly impacted by the travel ban (at least for now).
Jackie Cuneo, a senior loan officer at mortgage lender Summit Funding, tells Business Insider that so long as H-1B visa holders have a Social Security number, a US address, more than one year left on their visa, and a financial footprint established in the US, they’re treated like citizens.
It’s unclear how Trump’s travel ban could affect these standards, and if the rules vary for H-1B carriers who originated from one of the seven countries named in the executive order. It also appears Trump will go after the H-1B visa directly in an attempt to open up more jobs for American workers, according to a leaked draft of a new executive order.
In the hypothetical situation that an immigrant worker gets their H-1B visa revoked shortly after buying a house, they would have to pay between 6% and 7% of the home value in closing costs and transfer tax, a one-time fee imposed on the owner when a property changes hands.
Trump’s immigration ban sent shockwaves throughout the Bay Area, where technology companies rely on an international talent pool. At Facebook, more than 15% of US employees in 2016 worked for the social giant under a temporary work visa.
Gullicksen, the real estate agent whose clients backpedaled because they have a vacation coming up, said the “What if?” question is ultimately what cost him the sale.
“We were just about to submit an offer that was due … today, actually,” Gullicksen said. “A couple days ago, they said, ‘We loved that house but we’re really nervous about spending that much money and maybe not staying here.”‘
Real estate agents will be keeping a close eye on what happens next.
http://www.businessinsider.com/immigration-ban-san-francisco-real-estate-2017-2
Donald Trump’s travel ban has created a “propaganda bonanza,” that threatens the lifeblood of the technology industry, said Spencer Rascoff, CEO of Zillow.
The order imposes a 90-day ban affecting citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen and a 120-day bar on all refugees. A federal judge suspended the order after Washington state challenged it. Nearly 130 technology companies filed an amicus brief in support of Washington as a federal appeals court hears the challenge.
Trump argued Wednesday that the administration made the move hastily to prevent terrorism. His administration has repeatedly said it moved quickly to stop potential threats from “pouring in” to the U.S., though it has given no evidence to back an increased threat.
Rascoff said the order has been perceived abroad as a ban on the Muslim faith, sparking dangerous propaganda.
“We think it’s bad for business, we think it’s bad for the country, and frankly we don’t think it makes the country safer, I think it makes us less safe,” Rascoff said. “It cuts at the very center of the culture of the country, which welcomes refugees.”
http://www.cnbc.com/2017/02/08/zillow-ceo-spencer-rascoff-talks-tech-trump-immigration-ban.html
There is so much conflicting information in these articles it makes my head spin.
For the Indian couple in question….I will guess they are in the states on H1-B visas. If so, then they shouldn’t be buying ANY real estate. If, however, they are living and working in the states with a green card then their concerns are misplaced.
For the 100k visas that were revoked (as cited in the aritcle), well…..visas can be revoked at any time for any reason. They are nothing more than documentation stating that the US has granted said VISA holder permission to be in the US. A permission that can be revoked at any time.
whatever….it is not something I deal with professionally. But, the way these news stories are written it is obvious they are written with an agenda to sow confusion.
Just some guy, you are 100% correct. It’s annoying reading these type of articles when they’re 90% spin.
If Trump decides to go after h1bs real estate in San Jose is going to crater with smaller ripples happening throughout CA. If moonbeam isn’t careful he might p1ss off trump enough that he pulls the trigger. I guarantee h1bs pay more taxes than illegals.
A permanent resident or “green card” holder is in the US under a visa.
That’s the point and that’s why the ban had hsf such a negative psychological impact, literally millions of permanent residents have realized their right to work and live in the US might not be as permanent as they assumed.
Agree with what some guy said. One of the major problems we seem to have now are Journalists with political agenda’s editorializing in their news articles, by angling the facts to support their theme. That’s not journalism. Journalism is dying, and that’s not a good thing.
For example, this reporter, Miss Balakrishnan, highlights what she feels might be the result of bad economic planning by Trump, rather than perhaps one aspect of long-term misregulated immigration that might be inflating housing in general, and upper-end housing in particular.
It does beg the question, though, if we start getting moving on deportations, what will that mean for real estate prices in the short/long term?
Los Angeles has a LOT of illegal immigrants. San Diego has an amount to consider. Could it be that what might be a bad thing for real estate speculators, and landlords might be a good thing for people looking for more affordable housing?
Furthermore, could what might be a bad thing for, say, fast food places with antiquated business models based on exploiting minorities, be a good thing for fast food places like In ‘N Out, which has a modern business plan that allows for workers to move up in the company and get health care, and does not hire illegal immigrants?
In any case, if just half of illegal immigrants decide to set-deport or are deported, I wonder how much of an affect it would have on real estate, and especially rentals…
http://www.latimes.com/local/lanow/la-me-illegal-immigration-los-angeles-20170208-story.html
@shadash
CA is in for rough ride when Trump tries to take away federal funding because of our sanctuary cities. I have no idea how that will shake out or even if it is feasible, but has there even been a time when the White House was so openly hostile towards CA? Even the Bushes never bothered us too much.