Is foreign money keeping San Diego prices steady?

[Anonymous]

CostaMesa … you are typical of the mindset that accuses anyone who believes immigrants should learn the language or that people should not enter the country illegally of being racist. You consider yourself superior and competent to remark on the alleged “hypocrisy” of others while exposing your own narrow-mindedness and intolerance of opposing viewpoints in every sentence of your post. You feel that all you have to do is shout “racist” and “hypocrite” and “prejudiced” and it will intimidate people with whom you disagree. Not me. If I chose to move to a foreign country, I would not do so and then expect that country to translate everything into my native language for me. That was my point, and it is not racist. It also is not Republican or Democratic. The last I heard, both parties conduct their elections in English. Why not learn to debate ideas rather than calling names? And by the way, I speak French when I visit Paris.

[Alex_angel]

Please no bashing of foreigners. I do notice that 90% of people that look at open homes or model tours are Asian. Now it makes sense because even selling a 500 sqft pad in Hong Kong will net you $1 million.

My question is. I always wondered where the Asian families get their money from because they seem to be the only ones buying now.

[dejams]

Alex_angel, I think I am qualified to answer you questions because I am Asian and 90% of my friends are Asians. I don’t mean to generalize that all Asians are the same but majority has good spending and saving habits along with a good education that leads to higher paying job. Good job and good saving habit is the key.

[Cow_tipping]

I’ll agree with dejams. However the second generation is no where near the first. The sense of entitlement is through the roof. Yea maybe even the first gen, look at Casey Serin. Dude was cyber begging, and still said he deserved to have a good christmas.
Cool.
Cow_tipping.

[SD Transplant]

I guess I have to put my 2 cents into this thread since I have some qualifications: 1) first generation LEGAL immigrant to this country, 2) educated here and outside, 3)have plenty of friends in San Diego that are NON natives and RE buyers, and 4)I also happen to travel outside (Asia & EU), so I have first knowledge of foreigners’ perception of the US RE market. Ohhhhhhh, did I say my parents have moved here in their late 40’s, so they are still struggling with their English. (yes, indeed plenty of qualifications)

Summary of things worth discussing/adding to the subject:

***In my mind (having lived here for 12 years legally), it is a MUST/MANDATORY that any/all immigrants speak English. As much as I’m trying to enforce that idea in my big head (I realize my parents will never be fully FLUENT, yet they can have a decent conversation & as a result hold the appropriate jobs). Yes, they did sacrifice themselves to bring us to “a better life” (that’s debatable, but it’s the American dream)

*** My Ukrainian friends (too many): One has a decent job in Engineering Mgmt/Marketing with a big Cell Phone company, and makes decent (about 6 figure), his fiancée is a nurse . Bought a place in Carmel (92130 zip). Even though San Diego RE is over inflated, they do visit Ukraine still compare the living wage/RE prices against the OLD COUNTRY ……Conclusion: DECISION TO BUY

*** Another Ukrainian friend, at a BBQ last year, during a conversation he’s told me. I can’t believe prices in Ukraine are going up continuously there. $100,000 or $200,000 doesn’t buy you that much in Ukraine. Hence, my INTREST ONLY, condo in UTC WILL NEVER GO DOWN IN VALUE ………..ouch (I’ve advised against buying more, but with the current globalization….people make decision on MACRO economic perceptions…….not MICRO)…CONCLUSION: he’s loosing his butt trying to sell this UTC condo now………I’d hate to be mean, but I did not want to spell FORECLOSURE for him……….YES, he’s an engineer as well.

*** My Thai friend (now that we’re moving onto ASIA :-), is a business owner, runs his dad’s business……Bought with CASH (2003) a $1million in 92130 (Carmel Valley). Interestingly enough, his neighbors are: doctors (retired), across the street folk that inherited a lot of $, next door a CFO for a big PHARMA organization, next door a jeweler….. & across from his housing complex are only Chinese neighbors who own businesses in China, and purchased 3 houses….next to each other (all in $2 million range)………CONCLUSION: most likely anecdotal data, but ….YES, outside $ buys some RE here.

*** Yes, the devaluation of our currency (US dollar) is allowing folks from outside to buy RE here. Have you looked at the US dollar ration vs. EURO, how about vs. RON, etc. The globalization trend allowed affluent folk from OUTSIDE to buy properties here
Moreover, the emerging markets (Asia: India/China & Europe: Easter European Countries joining that just recently joined the EU: Poland, Hungary, Bulgaria, Romania, etc)… These countries are ON FIRE…their economies are still returning a decent ROI.
In fact, both the US and Western European companies are MATURED (have tapped out their markets) until these new areas have giving them the new market expansion/growth. Until a real break through in technology picks up the slack of our economic growth, these emerging markets are “it”. In fact, they flash their cash everywhere. I don’t know if you traveled recently in EU or more specifically Easter EU…..check out their PRICES lately (I feel poor as an American traveler…..these countries have more & more affluent folk). If we’re looking at the MACRO economic level, the world country wealth is balancing out (rich vs. poor countries). Big American Corporations are taking advantage or that & make the money (the money goes to CEOs and their investors) …Some make the might trickle to us in our stock/401k portfolios.

Hence, everything vis-à-vis the Emerging Markets from the poor or non-existent infrastructure to the high tech Fortune 500 organizations, are pouring big $ in investing there (Cheap labor, opportunity, new market and YES RISKY…..I know….but not FLAT like the market here in the US or Western EU).

These people (emerging markets) make more money, and some (maybe not via the best practices of business found themselves with LOTS OF CASH)..they might be your next door neighbors (again….this is not a scientific research).

***I could write a novel, but I better stop here.

[PerryChase]

sdjdguy, the foreigners who shop at Fashion Valley are mostly Mexicans. Many of them come on day trips from Mexico like we go to Tijuana. Unlike Americans who visit Tijuana, those upscale shoppers speak English quite well but choose to speak Spanish among themselves.

It’s well known that Mexicans contribute greatly to retail in San Diego. That has been documented by the San Diego Chamber of Commerce.

We benefit greatly from Mexicans investing in California. Well-to-do Mexicans all shelter some of their money in California. A great many do buy houses also. Mexicans who qualify have border passes to shop and visit America as tourists. They are free to buy houses and open financial accounts but that pass does not allow them to work here.

[SHILOH]

You can have the best spending & savings habits –still a home priced 10X your income ie, median income compared to median home price…is not sustainable.

San Diego has more Mexican “immigrants” than any other group —and in general they are not “rich foreigners.”

It would be interesting to know who all these wealthy foreigners are and what % of them are in SD buying homes.

[jztz]

SHILOH – it’s GOOD JOBS and GOOD Saving habits, like Dejam said. SD transplant – thanks for the run down. Interesting. Indeed, some really rich foreigners (who’ve make their money outside of SD area) park some money here. In fact, some rich Americans do the same – I’ve heard that there are quite a few second homes in RSF belonging to billionairs else where in this country. But they don’t inflate general housing price here.

Talking about 2nd generation Asians, I read an article on OC Register this weekend profiling 2nd generation Asians who follow the tradition of helping to support their parents in their old age. Growing up with that expectation (to support your parents) certainly motivates you to seek a good job. I know that from personal experience. Once a realtor sugguested that I should hit my parents for any downpayment, like a lot of people do. I just laughed.

Back to the topic — foreign born professionals who make a living in SD are part of the local economy, their money is not foreign money. Real “foreign money” (from rich foreigners or corrupted sources) probably on the margin pop up prices in certain neightborhoods, but I doubt that is a big influencer for SD housing prices in general.

[34f3f3f]

I doubt that these ‘foreigners’ are from Europe who look more to Florida for second homes because of the distance. The fact that US and European airlines have relaxed their stand off may entice a few long haul wonderers. I would also think that cash buyers may be put off by property tax. The chinese emphasis on education has ensured managerial postions in the work place, but that doesn’t make for cash buyers. There are rumours circulating that a Chinese (and Taiwanese) influx of cash rich individuals are keeping property prices up, but I think that is just heresay. What is more likely is that some foreigners are window shopping as a result of the weak dollar. Also, there are plenty of foreign speaking people here in LA, and some may be tempted by or curious about SD prices.

[Alex_angel]

The asian groups are not window shopping. It is plainly obvious in a lot of areas. Almost every new home in the Pardee developments in Carmel Valley West are now being sold to Asian families. The same goes in Del Sur and 4s. Take a walk around and it is obvious. They have the money to spend and really don’t care about the market. They are in this to own a home and house their families for a long time in them. When you walk into any model tour the agents push aside the white people when they see an Asian family walk in. It is plainly obvious that they know who is window shopping and who has the money to buy.

[LostCat]

You read in the OC Register that second generation Asians have to take care of their parents? I am sure there is some truth to this because it is cultural. It works like that. Many American, no matter what race you are will probably be in the same boat if our SS Tax doesn’t pan out like it should over the next 20 years. But wait, is this the same OC Register that tells us time and time again that there is not going to be a housing market crash, one that reports on Anna Nicole Smith’s kid and who the daddy is instead reporting what is really going on in the middle east. What the heck is all this generalization going on. There are just as many foreigners buying houses, condos, condo conversions (including Asians) in south east San Diego as there are in Carmel Valley. There are just as many poor, stupid, misdirected asian, blacks, mexians, indians as there are poor, stupid, misdirected whites. Ethnically, San Diego is very diverse and not all Chinese are well off and well educated. Asia is a large place and china is very populated. There are many different types of Asians. Crap, Cambodia is one of, if not the, poorest country in the world. They are about as Asian as it gets. They can’t do anything right over there, especially since the 1960’s after Pol Pot killed everyone that knew how to do anything. Plus all the ex Khmer Rouge own all the major utilities and income companies… Northern China is horrible too (we here in America don’t hear much or don’t know that part too well, just the port cities). I am pretty sure the Chinese on the net right now, buying homes in Carmel Valley, going to UCSD aren’t the same Chinese that are coming to the USA through the Mexican border wrapped under the engine block of a Chevy suburban. These guys (which make up a larger percent of the Chinese population), aren’t living in Carmel Valley and they are not here to dispute the other oppressive Chinese that think their culture is so sustainable. Heck if America had a population of 1.5 billion, we could put 90% of the population to work in a sweetshop while 10% of the population lived like kings. The poor would never have a voice and everywhere the rich American went, they’d tell the rest of the world that they have it good and that education and saving money is priority number one for their culture. If you want to look at some real facts about a culture that knows how to save and also educate themselves, England is number one in all of the above. Their population is just 1/20 the size so we don’t feel the impact as greatly.

[masayako]

Alex_angel,

Asians are hard working, save alot, but blind sighted when it comes to real estate. They just want a house to settle down and start a family regardless of the cost. They also consider that a long term investment (as well as commitment to their sprouse by providing them with a roof over their heads). They generally believe real estate never go down. Even if it does, it’s a short term thing. In a long run, it always go up.

Also, Asians hate the stock market because they heard too much bad stories of the 98 stock crisis in Asia, the great depression of 1929, the tech bubble burst of 2000 etc…

So, in general, Asians considered themselves conservative by investing in ‘real’ items, like buying houses, instead of buying stocks/bonds. Every young Asians are taught to buy a house before getting married. It’s like a requirement of marriage. It’s like: “If you don’t have a house, you probably are not financially secured enough to marry.”

Anyway, they are stubborn and, when it comes to houses, they suddenly become ‘bad’ in math. They fall in love easily with their ‘dream house’ because a nice house is considered a luxury from where they come from (China, Japan, Hong Kong). So, whenever their financial situation allows, they buy the biggest, nicest house they possible can afford, at all cost. That’s stupid, in my opinion.

I am Asian and I am not racist. I am just telling you guys how the majority of the Asians think. Hope that helps.

Masayako

[dejams]

Alex_angel, I will check out the areas you mentioned to see what you said is true. I am Asian and I can’t see myself buying a house in this market anytime soon. The price is off the chart comparing to the income level. As for pushing aside certain group of people (non-white)in the model homes, I see it here in certain areas of Phoenix, AZ. You can tell when a saleperson really want to help you or not by their converstion and body language. This is the first time I have heard white being pushed aside for minority.

[dejams]

masayako, what you said is so true. Most Asian guys would like to have a house before married and some even take up two jobs to do so. It’s in our culture to own a house first before investing in stocks, bonds or mutual bonds. They think it is a waste of money to rent and why pay a landlord when you can pay yourself. I also thin it is a status symbol to own rather than rent.

[PerryChase]

I agree that immigrants who work and earn their money in America are NOT foreign money. They are part of the local economy. It’s wonderful that they are earning the wages that allow them to buy in this overpriced market.

The immigrants of today are of different races than the immigrants of 100 years ago but they have the same ethics that built this country. They are not afraid of hardship and they share costs and savings with their extended families.

One Asian person I know lived with is brother’s family for many years to save for a house. Now his niece and her husband live with his family as they save for a house.

Foreign money is money brought in from outside the country. Foreign money (Chinese, Japanese, Middle-Eastern, etc..) invested in MBS and treasuries was for sure propping up the market even as the Fed was raising interest rates. That’s what allowed us to have the liquidity and loose lending standards that led to the boom. For those of us who cashed out on real estate, we should be thanking our friends, the foreigners.

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