I have been watching my little area in Torrey Hills closely, and am puzzled by the small declines seen thus far.

I have formed an alternate theory that may explain the stickiness. In Silicon Valley there is a city, Cupertino, that is heavily Chinese. The city has no real redeeming value besides high test scores in the schools, at least relative to any of the other cities in the area. For some reason, Cupertino became a magnet for higher income Chinese professionals (the lower income go to Milpitas, across the valley). The result is that housing prices in Cupertino are, for the quality of what you get (mediocre 1970’s era tract houses), quite high.

I am wondering if the same thing has happened to Carmel Valley and Torrey Hills, especially as I watched a parade of Chinese marching through open houses in this neighborhood, and recent house sales going to Chinese families.

I do not know whether this is significant, or even correct, but if it is, what does it mean for real estate values in the area long term?