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Real Estate Matters

Original post made on Apr 4, 2013

As a company that is at the forefront of marketing to the Mandarin-speaking community, we love the high level of emphasis that many sellers and their real-estate agents place on "cash offers." Because many foreign investors and recent immigrants lack the requisite credit and income history in the United States to qualify for many banks' mortgage programs, they often pay in cash.

Read the full story here Web Link posted Thursday, April 4, 2013, 9:38 AM

Comments (35)

Posted by Dylan, a resident of Community Center
on Apr 4, 2013 at 12:34 pm

My family has been renting in PA for the past couple of years, love the place, our children love the school. Finally ready to take the plunge and buy a home, solid financing, and we find that sadly, we are priced-out but foreign investor all-cash offers. We are now looking into relocating up North, were our $ will stretch a bit more, new schools for the kids, etc. I know this is fair and square, market economy and all that, but cant help to feel a bit angry at the current situation, what would PA look like 5-10 years from now, if most homes keep being purchased by wealthy foreign investors...? Sad to leave, but maybe we are better off out of here!


Posted by OhlonePar, a resident of Duveneck/St. Francis
on Apr 4, 2013 at 12:48 pm

Dylan,

Sorry to hear that. Palo Alto's usually a seller's market. If you can manage to buy, the investment is a good one. The cash-only overseas buyer is the newest wrinkle, but there have been others. The dot-com boom/IPO business did a real number on would-be buyers.

Anyway, my understanding is that the cash from China is flooding the U.S. because Chinese real estate is in a bubble. When it pops there should be fewer overseas cash offers here and the real-estate market here should, again, be open to non-cash offers.

My advice would be to keep looking and network. Some people like to sell off-market to a family they like--someone they know will take care of their home. We have a lot of older homeowners who don't have to sell, but can. Some rentals are like that.

Anyway, good luck.


Posted by area man, a resident of Another Palo Alto neighborhood
on Apr 4, 2013 at 12:52 pm

Sounds like an ad for DeLeon to me. And this guy, managing broker and general counsel for DeLeon Realty, is listed in the byline as a member of the Palo Alto Weekly staff. Conflict of interest anyone?


Posted by Trail of Tears, a resident of Another Palo Alto neighborhood
on Apr 4, 2013 at 3:34 pm

According to articles I have read in the Wall St Journal, Barron's, and Investor's Business Daily, the Mainland Chinese have left a trail of burst housing bubbles between California and China. The latest apparently was Vancouver.

It seems that a popular Chinese immigrant plan is to become a citizen of Canada, easy if you have a college degree, then buy a house there. Once you are a Canadian citizen, it is apparently far easier to get a visa for the US. Although most countries in the world, including China, do not allow non-citizens to invest in real estate, the US does.

The mortgage interest rates here for non-citizens are extremely high. Many Mainland Chinese need to launder money they smuggled out of China, so they invest in houses that they may or may not live in, may rent, or allow to sit unoccupied and unmaintained.

We sold a house last spring that was appraised between 1.7 and 1.9 million, but we had many Chinese and a few Korean cash offers between 1.2 and 1.3 million. As we needed a larger house, we needed the most we could get out of our house, which was nearly paid for. Many citizens offered us far closer to our asking price, most had their loan applications rejected, but we waited patiently. It paid off, literally, in that we got more than our asking price and far more money than any foreign cash offers.

We are still in Palo Alto as a result. If we had taken an Asian cash offer, we would not have been able to buy a larger house in Palo Alto. What a difference half a million makes, even when it isn't cash. [Portion removed by Palo Alto Online staff.]


Posted by Ankyl. Spondi, a resident of Old Palo Alto
on Apr 4, 2013 at 3:45 pm

[Post removed by Palo Alto Online staff.]


Posted by Hmmm, a resident of East Palo Alto
on Apr 4, 2013 at 3:53 pm

Ankyl. - respectfully, that isn't the intention from what I've read on this thread. There is a very real issue - foreign money impacting the lives of locals, for good & bad, & it deserves discussion. I think it's a worthwhile subject to discuss as long as it isn't race-based & is about the influence of foreign cash on this area. This means it affects Chinese Americans, other Asian Americans and other American citizens in the area. It also affects EPA - they've been buying here, too.


Posted by annecdote annie, a resident of Another Palo Alto neighborhood
on Apr 4, 2013 at 4:08 pm

Ankyl, Not an issue, whoever you are....if an Asian who barely speaks English tries to tell you that he wants his eldest son to go to Paly, not Gunn, because everyone in Beijing knows Paly, no one knows Gunn...it is safe to assume they are from China.

If a real estate agent calls to make an appointment to see a home and explains that their client speaks very little English because they are from South Korea or Guang Zhou, it is safe to assume they are not American citizens.

Now, why are you so sensitive and presumptive?


Posted by not an.issue, a resident of Community Center
on Apr 4, 2013 at 5:53 pm

[Portion removed by Palo Alto Online staff.]

why does it mater where they are from. If the money is clean, nothing illegal about buying the property. I also doubt much property is exchanged in the manner you describe in Palo alto.


Posted by anecdote annie, a resident of Another Palo Alto neighborhood
on Apr 4, 2013 at 7:06 pm

[Portion removed by Palo Alto Online staff.] The issue is with rude behavior and comments , and with people thinking you will sell cheap if they give you cash, or people thinking they deserve a special deal because they are somehow special. This IS America, all people are created equal, and ideally, treated equal, no one gets special treatment because they are "better".

What the Chinese and Koreans are doing is legal here; however, if they are discovered in China or Korea to be sneaking large amounts of cash out of their native countries, where it is highly illegal, they could face life imprisonment there.

Actually, a significant amount of property IS exchanged in California in this way by Chinese nationals. That is why it is in the headlines of the WSJ, IBD, Business Week, Barron's, the NY Times, etc. Read any of them on a regular basis and see. It is the talk of the financial world. It is even discussed in Washington DC ( we were there last week).

[Portion removed by Palo Alto Online staff.]


Posted by Grover, a resident of Adobe-Meadows
on Apr 4, 2013 at 7:14 pm

[Portion removed by Palo Alto Online staff.]

Annie, so what if an Asian barely speaks English and isn't yet an American citizen? Generations of Jews, Italians, Irish, etc. were in the same situation in the last century, and are similarly criticized by self-proclaimed real-Americans as being unable to assimilate and generally repulsive. [Portion removed.]

Remember the guys on the last thread who hysterically ranted about how Chinese were all corrupt like Bo Xilai, Chinese students in our schools all cheated on their tests, and all their money was stolen and smuggled out of China? I think it's only a matter of time before you all accuse them of witchcraft and eating babies.


Posted by Hmmm, a resident of East Palo Alto
on Apr 4, 2013 at 9:24 pm

Foreign cash, as Annie mentioned, is being talked about in many places, as it's happening in many places. Here's the latest in SF:

Web Link


Posted by w-t, a resident of Barron Park
on Apr 5, 2013 at 5:55 am

It is first important to say this is nothing about race or even ethnicity. Its about criminals laundering their ill gotten money, smuggling it out of China and its negative consequences which are
1. Influx of criminals into our community - with all associated corrupt and exploitative values.
2. Social unrest in our community as these values clash with the liberal, multicultural values that up until recently dominated.
3. A huge asset bubble. When prices are disconnected from the local salaries and local economy, many many times earnings, then those property prices are only sustainable if the money keeps on flooding in. Now there is no reason to believe that it wont. There are estimated to be over 100 million middle class Chinese, and as friend of mine from Singapore said recently, most of them seem to want to come to California. So my guess is that the bubble will just keep on inflating for a year or two before it pops with terrible results for the local economy.
4. A rather dishonest gaming of our school systems. Many of these mainland Chinese want to educate their kids. Unfortunately they bring the same morality to education as they did to their Chinese business dealings in kleptocracy that is China. And that means cheating.

All in all its not a good deal for Palo Alto.


Posted by Grover, a resident of Adobe-Meadows
on Apr 5, 2013 at 6:54 am

W-t, regarding this "influx of criminals into our community" who made their money from "Chinese business dealings in kleptocracy"...have you actually stopped to talk to any of your Chinese immigrant neighbors? In our neighborhood and local PAUSD school, I've found them almost all to be families where both husband and wife have advanced technical degrees, usually in engineering and computer science, and where both have worked for years at US technology firms to save enough to live in this area.

I've raised this point a few times in these forums, but it is always ignored by those who would like to ignore reality and instead embrace some hysterical, unfounded notion that all Chinese people in Palo Alto are criminal business people laundering ill-gotten corruption money.

Let's face it, you just don't like to see your beloved town become less white and more Asian and you're grabbing on to some demonizing stereotype to justify your prejudice, despite the fact that it has little basis in reality.


Posted by Resident, a resident of Another Palo Alto neighborhood
on Apr 5, 2013 at 7:56 am

I think there are more than one kind of Chinese people moving here. I was speaking to someone from China I know quite well, the parent of a classmate of one of my kids who I have known since elementary days. They are hardworking parents with two children - deliberately spread 10 years apart, who are hard working with mainly American values of honesty and hard work. However, they tell me that there are also some very suspect Chinese people moving here, with lots of money, lots of unethicical behavior and do not care very much about the US or its values. These parents have no scruples about leaving their kids here alone, having more than one "wife", getting as much money from whatever source they can to spend on giving themselves whatever social advantage it can buy, and treating those back home with abuse to make the money to do so. Not the sort of parents of peers for her children (or mine).

I think that it is worth discussing a subgroup of foreign nationals, whether they be from Europe, Africa, Asia or even other North American countries, who have infiltrated our town and in particular our schools with ideals that see no problem with cheating or illegal activities and feel fine with getting away with it. If some of these are allowing their children to live on their own, cheat at school, and other behaviors which they think acceptable and in the USA are not, then I don't want my kids learning that it is OK to do such things as long as they get away with it.

My problem is the message my kids are learning from those who are living on the fringe of legal v illegal behavior and ultimately taking UC or other college places from my kids who are being completely honest.


Posted by Hysteria about asians, a resident of Stanford
on Apr 5, 2013 at 8:15 am

I agree that there seems to be a group of people on this forum, who are constantly (and without actual proof) attacking Asians. There are thousands of Asians who live in Palo Alto--they are good, hardworking people. What is also interesting is the fact that the Weekly seems to be deleting comments that bring up this point. Why?
Having seen many of these posts, it is clear that some of these people who have a problem with Asians speak in code. The above poster is a perfect example:
"They are hardworking parents with two children"--of course you have to mention "good" Asians.
"mainly American values of honesty and hard work. "-but they are not completely "good Americans" and Asians do not value honesty and hard work??
"some very suspect Chinese people moving here"--any proof??
"lots of unethicical behavior and do not care very much about the US or its values."--how many of these "evil" asians are there in Palo Alto? Your friend knows all of them??
"I think that it is worth discussing a subgroup of foreign nationals,"--of course it has to sound like a single group is not being singled out.
"cheat at school, and other behaviors which they think acceptable and in the USA are not"--americans do not cheat in school.
In general, these comments are very familiar--repeated over and over again in every thread that deals with the subject. W-Ts comments are also in that same vein--plenty of conjecture biut no proof or facts

Bottom line is that these poster(s) do not actually provide any proof for their comments just hysterical rhetoric about these "evil" asians taking over palo alto



Posted by anecdote annie, a resident of Another Palo Alto neighborhood
on Apr 5, 2013 at 8:31 am

@grover: it does not matter what nationality the buyer is, as long as they do not try to cheat you. Ankyl Spondi had asked, in a previous post, how I knew the buyers were Chinese. Her post was deleted. Thus my answer subsequent to that.


Posted by Resident, a resident of Another Palo Alto neighborhood
on Apr 5, 2013 at 8:36 am

Hysteria

Since it is my comment you have pulled to pieces I want to defend myself.

I have heard anecdotally from many people about unethical behavior and remained open minded - even when some of these anecdotes came from my own kids about people they knew in their own classes.

However, the rumors are strong and as you say I have no proof of anything but my kids are definitely getting the message that these classmates are succeeding through unethical behavior. As a parent, it is hard for me to hear this and know how to respond to my kids' comments.

You talk about "code" when I tried to explain my concerns. You also talk about my decision to mention "good Asians" to water down my so called discrimination. I prefer to say that I am not painting all people from the same country with the same brush. I am fully aware that not all people from the same place have the same behavior.

In the same light, I will say that not all German people in the 40s were Nazis, that not all white people in the south in the past were KKK members and not all Muslims are terrorists. I won't say that all black people in Oakland or EPA are gang members. I judge people I know on their merits regardless of where they are from and I tend to look for the good in people rather than their faults. I won't generalize about any group of people and accept that there are subgroups in any and all communities.

There are some people in Palo Alto who are gaming the city with money from abroad. I have no proof and in fact I can't say what proof would be acceptable to you. But, there is unethical behavior and it is affecting my kids. As I said, I have no proof, but having had a conversation with someone who understands what is happening far better than I do, I felt it was worth contributing to this discussion.

I worry about what my kids learn from other people's morals. Do you?


Posted by w-t, a resident of Barron Park
on Apr 5, 2013 at 9:14 am

Grover,

You are the one who sees the world through racist glasses. You turn every discussion into one about race. This is not about race. It is about people smuggling money out of China - something considered criminal to them, and criminal to us if they were caught, and buying real estate here with it.

They are not allowed to bring this money into the country. Therefore this is money laundering through our real estate, and we are all too liberal even to mention it! Stop the race thing. I welcome the many Asian families here. They are hard working, and contribute in every way to our community. I do not think of all "Asians" as being the same. You are the one who does that. I am talking about criminal money landerers.

I was in whole foods the other day and there was a group of 4 chinese men barking orders in the rudest way to the man behind the meat counter. The meat guy looked really annoyed. Just plain rude.


Posted by w-t, a resident of Barron Park
on Apr 5, 2013 at 9:22 am

[Post removed by Palo Alto Online staff.]


Posted by Confused and hysterical, a resident of Charleston Meadows
on Apr 5, 2013 at 9:39 am

anecdote annie--you are confused--ankyl spondi asked trail of tears how he/she knew they were chinese, not you. Unless........

Most of these similar sounding postings all have a common theme--hearsay, things someone heard and the line:
"I was speaking to someone from China I know quite well, "
" It is the talk of the financial world. It is even discussed in Washington DC"
"I was in whole foods the other day and there was a group of 4 chinese men barking orders in the rudest way to the man behind the meat counter"
"having had a conversation with someone who understands what is happening far better than I do,"


Posted by Pesimist, a resident of Another Palo Alto neighborhood
on Apr 5, 2013 at 1:34 pm

Watch out, this maybe a housing bubble we are in. Vancouver went through a similar thing with many Asians from Hong Kong purchasing property. When the prices got impossibly high they moved on to Silicon Valley, so here we are. Folks this may not last and the bubble may burst.


Posted by w-t, a resident of Barron Park
on Apr 5, 2013 at 1:51 pm

[Post removed by Palo Alto Online staff.]


Posted by Will Lin, a resident of Meadow Park
on Apr 5, 2013 at 1:56 pm

Will Lin: Vancouver Housing Bubble: Why Chinese Investors Will Return
While China's policy change has impacted investors' cash flow in the short term, it hasn't curbed their enthusiasm for Vancouver real estate. The sudden rise and fall in real estate prices that we're seeing now in China, as well as fluctuations in the overall economy, mean that people view investing there as no less risky than placing bets on a baccarat table. For many Chinese investors, parking money in Vancouver feels as safe as investing in treasury bills.


Posted by w-t, a resident of Barron Park
on Apr 5, 2013 at 2:05 pm

A CDIC report suggested that nearly 10,000 luxurious homes had been sold by officials in Guangzhou and Shanghai last year (2012). It also claimed that $US 1 trillion had been smuggled out of China illegally in 2012. Economists and experts cast doubt on the figure, but said the flow of money was dramatic. Li Chengyan, a professor at Peking University, suggested that about 10,000 officials had absconded from China with as much as pounds $US100 billion.
The CDIC said 1,100 government officials had fled China during last year's national holidays in October and that 714 had been successful in getting away. In the United States, the National Association of Realtors said properties worth more than $US7 billion had been bought by Chinese in the US last year.


Posted by Confused and hysterical, a resident of Charleston Meadows
on Apr 5, 2013 at 2:18 pm

[Post removed by Palo Alto Online staff.]


Posted by Grover, a resident of Adobe-Meadows
on Apr 5, 2013 at 2:26 pm

w-t, your last few posts prove my point. You claim that your only concern is that foreign money laundering is unfairly driving up house prices in Palo Alto. "This is not about race.", you say.

But in your attempt to support your argument, this is what you bring up:

-You saw four Asian men being rude at Whole Foods' meat counter.

-You claim that a Chinese American Gunn student improperly used her father's research in order to win a school science prize.

-You (under a different screen name) cite an article reporting how a Hong Kong couple sued a college consultant after their child didn't get admitted to Harvard.

Do you realize that none of these three things in any way support the notion that illegal money laundering from China is gushing into the Palo Alto housing market? No, they're just random data points that you believe provide "evidence" that Chinese people are morally inferior to others and thus should be stopped from moving here.

That's what I mean about how you're just using the money laundering thing as a convenient excuse for your real argument: you just don't like all these Asian people moving into town.

And that doesn't even get at how faulty your thinking is in the first place. You saw four rude Asian men at Whole Foods? I saw a white man being rude to a clerk at Safeway the other day. A Chinese Gunn girl not acting ethically? What about the white Gunn students cheating on tests, dealing drugs, and bullying their peers online? Hong Kong parents trying to get their kids into Harvard? What about white rich alumni pulling every string and working every unfair inside connection they can to get their kids into the same school?

Do we characterize an entire race as objectionable because of the questionable behavior of a few? I realize that the examples listed above are not representative and that racial stereotyping is something we should avoid. You should do the same.



Posted by Wondering, a resident of another community
on Apr 5, 2013 at 3:03 pm

"And this guy, managing broker and general counsel for DeLeon Realty, is listed in the byline as a member of the Palo Alto Weekly staff. "
Do you mean the guy who writes a column in the Real Estate section?


Posted by wu-t, a resident of Barron Park
on Apr 5, 2013 at 3:11 pm

Grover,

I do not use two different names. Do I need to spell it out for you, these are all mainland Chinese. The rude people in the store. The cheating student. The cashed up real estate purchaser laundering money. These are all from Mainland China. Just because they are Asian you put on your race glasses and do not permit a discussion on what is happening here. We are being bought up by money launders who did something considered illegal in China, and illegal in the US.

If you dont know your history China is a despicable place. It has morphed from communist to fascist state run by completely corrupt officials who exploit their own masses to steal money from them. They rig their currency, imprison dissenters, and now they are in a house near you. The air is unbreathable. There is a massive housing bubble, and anyone who has any power (however obtained) is trying to get out.
A ton of them are living near us and are prepared to pay double triple whatever for the house next to you.

Do you really think that the hardworking couple from South Korea like these people? No they dont. You just lump them all together as "Asian." You are the person who sees this through race. I see it politically. China is a terrible regime and our little town is being bought out by those very people who exploited and benefited from this terrible regime. It is a massive change to our community. And you want to say its all about anti-Asian prejudice.

Just look at the facts. The statistics. The source of the money. The type of petty government officials who smuggled the money out.
Grover you are living in a fools paradise.


Posted by Confused and hysterical, a resident of Charleston Meadows
on Apr 5, 2013 at 3:20 pm

[Post removed by Palo Alto Online staff.]


Posted by Monsieur N., a resident of Another Palo Alto neighborhood
on Apr 5, 2013 at 4:20 pm

Here is a first person narrative: when I was a math teacher at Gunn ( year 2000), I gave Bs on tests to two mainland Chinese kids, one boy, one girl. The mothers of neither spoke English. Both students got teary, but the the girl soon progressed to hysteria. I told her that if she could not stop crying, she should go to the office and lie down, or ask to go home.

That made her worse, and she was going to be tardy for her next class. Between sobs, she told me that she was afraid to go home because her mother would demand to see her test. Seeing a B ( not her first one in math), her mother would be angry and probably disown her. I responded by telling her that parents often say things they do not mean, and her mother would not do such a thing. Her reply was that yes, she would, she was from the old country. I wrote her a tardy slip and sent her on to her next class, after reassuring her that it would be unproductive for her mother to do that, and that her mother would be bringing more shame to herself than she would ever bring to her mother.

To make a long story short, the girl was not in class the next day, and I felt terrible dread....was the mother a monster? I reported what the girl told me to my principal, so that truant officers could be notified if necessary, but the principal did no think it would be.

Sure enough, the girl was in school the next day, but very sad-looking. After class, I asked her if there was anything I could help her with, and she said, no, it is too late, my mother took my puppy to the shelter yesterday to punish me for my second B. I was stunned, to me dogs are almost like children, but that is probably not true of non-European cultures, I rationalized to myself. However, this girl was just Americanized enough to be traumatized by this, and my heart went out to her. I explained to her that in her mother's time, in China, dogs were considered inessential and less important than here, because there was probably not enough food for people and dogs in many families. I wrote her a tardy slip again, and the girl never got another B in my class again.


Posted by wu-t, a resident of Barron Park
on Apr 5, 2013 at 6:40 pm

[Post removed by Palo Alto Online staff.]


Posted by Outside Observer, a resident of another community
on Apr 5, 2013 at 7:10 pm

China Bashers,

Beware the China Hackers. They are watching your postings ;)


Posted by Grover, a resident of Adobe-Meadows
on Apr 5, 2013 at 8:00 pm

Monsieur,

Some first generation Asian parents (not just from China, but from Korea, India, Singapore, Taiwan, etc.) do put considerable academic pressure on their kids by mainstream American standards, reflecting the test-oriented academic culture of their home countries. I've met many second generation kids and first generation parents to know that stories like the one you've told are not uncommon.

But in the context of this discussion, I have to ask: so what? You're not saying that the academic pressure in first generation Asian families is a reason to prevent them from moving to Palo Alto, are you? It's one thing to allege corruption and criminality--albeit in a completely misguided manner--as w-t and others have here as a reason to stop Chinese immigrants from buying here...but not liking how parents make their kids study too hard isn't a good reason either.

If you look at this from another perspective, I think you'll realize just how prejudiced and racially-based this kind of talk is. First of all, substitute "Baseball" and "game" for "Math" and "test" in your story, and you'll get a pretty accurate description of the stereotypical rabid, pushy Little League Parents who make their kids miserable. Many such people also live in Palo Alto. Second, there are plenty of parents in town who people like w-t would consider real Americans, and these parents cheat on their spouses, work too hard at their jobs and never see their kids, or regularly abuse alcohol and drugs.

I'm not going to point to these Little League parents, alcoholics and cheaters as evidence that white people are inherently flawed and are ruining our town. By the same token, it's just as offensive to paint the entire group of Asian immigrants (or worse, all Asians) as somehow less-than-worthy of living here.

So thanks for your story of your experience as a teacher at Gunn, but it really doesn't prove anything. Some Asian parents do things you find objectionable. Some white parents also do things you would find objectionable. That's just the way life is, isn't it?











Posted by w-t, a resident of Barron Park
on Apr 5, 2013 at 9:49 pm

[Post removed by Palo Alto Online staff.]


Posted by Ankyl spondi, a resident of Community Center
on Apr 5, 2013 at 10:08 pm

[Post removed by Palo Alto Online staff.]


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