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Selling California to the Chinese September 13, 2013

Posted by geoff in News.
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I constantly toy with the idea of moving back to SoCal, but I’ve been discouraged lately by the prices: real estate is heating up, with homes selling at prices almost 25% higher than last year. Seems like good news, “But how?” you ask. Good question – it’s not like our labor market is all that.

The clue comes a bit later in the article I linked above:

Cash buyers made up 27.6 percent of total transactions last month compared with 30 percent in July and 32 percent in August 2012.

These days “cash buyers” mostly mean people from China, who find that our real estate market is more stable and lower priced than the market back home.

But let that soak in for a second. 30% of home sales in Southern California are likely to be foreign (esp. Chinese) buyers. The same thing is happening in the Bay Area, and may even be more prevalent there. And commercial real estate is seeing the same levels of investment from abroad.

Same thing happened in the 1980s with Japan, so these waves of foreign real estate purchases come and go. But when the waves get this large they give me a queasy feeling.

And they’re certainly no indicator of economic recovery, much as realtors would like to think so.

Comments»

1. Mrs. Sobek - September 13, 2013

DON’T DO IT! For all there is to love about SoCal (and there’s a lot to love…I grew up there), it’s just not worth it!

Interesting FYI: The people who last year bought from my parents the house I grew up in were Chinese and they paid in cash, and then they bought the next door neighbor’s house up as well. Last I heard, they hadn’t even moved in yet. I believe they still owned another house in SoCal at the time. And my brother just sold his SoCal home to a very anxious buyer…a Chinese lady (not sure if she paid cash though).

2. Jimbro - September 13, 2013

I’ve read articles describing China’s economy as in a bubble too. Home buying (a tangible asset) in the US is another version of diversification of their assets if that’s the case.

3. daveintexas - September 14, 2013

*waves hi to Mrs Sobek whom I haven’t seen in a month of Sundays.*

Wishes you and the four kids well.

Yeah, I did that ****.

4. geoff - September 14, 2013

DinTX: I edited your comment to remove your occupational reference. You might want to go back and modify it.

5. daveintexas - September 14, 2013

oh.. which one?

6. geoff - September 14, 2013

I meant Comment #3 where I put in the asterisks.

7. Nan G - September 16, 2013

We needed an all-cash sale when we left So Cal for Utah.
Our buyer was a Chinese couple.
Our 600 square foot beach condo got us enough cash for a huge place in Utah.
Added in were an extra bedroom, central air and heating, a laundry room, two car covered parking, and an acre of land!
For the EXACT same money!
And we’re in the same small town of just 24,000 people (homes zoned for horses) where Mitt Romney just bought!

8. Nan G - September 19, 2013

I forgot about the OTHER Chinese women who owned in those condos in LB, CA.
She happens to have EVERY symptom of the Navy shipyard shooter!
She hears voices,
She thinks there is something under the building causing her floor to have ”vibrations.”
She believes people in the complex who don’t even know one another are meeting and plotting against her.
She even unplugged her refrigerator because it was vibrating and keeping her up all night.
I saw where someone called the cops on her a couple times.
They know she’s nutty as a fruitcake.
I hope she never gets a gun.


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