4 ms·

Could it be foreign money divesting in California housing ?

matheweis 8y ago
This is a hot issue up in the Seattle/Vancouver area as well. tl/dr, the proper studies I’ve seen suggest foreign money doesn’t have as strong an effect as most people assume, and where it does it amplifies trends rather than drives them.
- petermcneeley 8y ago
  Does there actually exist a dataset that shows this? The data that you need is income, age, wealth (loans), purchase price etc. I dont even think the government has this data, and even if it did Im guessing for privacy reasons this dataset would never be made public.
  - danso 8y ago
    California county assessor records are, or were public. When I worked in Sacramento a decade ago, you could look up property by address on the county website and not only get the assessed value and taxes owed, but the name of the owner and realtor, past owners, price paid and amount of loan. Seems like much of that info has been removed from the public facing website, but that doesn’t mean it isn’t available for purchase. That’s presumably how Zillow gets its data.
    - muzz 8y ago
      The records have names, but how do you correlate that with nationality? I.e., there are plenty of people with Chinese or Indian names that are Americans.
      - danso 8y ago
        It would be a statistical estimate. Some foreign buyers may have trusted go-to realtors who specialize in these kinds of transactions. IIRC, home owners have to indicate whether a home is a primary residence or being used for rental (for tax purposes). All these factors may make the statistical estimate more accurate with reality.
        petermcneeley 8y ago
        Is this not a valid estimate? "The study found that two-thirds of all sales of detached houses in the University Endowment Lands, Dunbar and Point Grey neighbourhoods were purchased by buyers with non-anglicized Chinese names. That group purchased 88 per cent of houses priced at more than $5-million." https://www.theglobeandmail.com/news/british-columbia/vancouvers-housing-market-fuelled-by-chinese-buyers-study/article27064577/ https://www.theglobeandmail.com/news/british-columbia/vancou...
        danso 8y ago
        Sure, though that study was done in Vancouver, and their laws about real estate records being public record might be different than California or the other U.S. states (the article mentions only the methodology regarding Chinese names). You asked if there was a dataset that could be used in studying impact of foreign buyers; I was just pointing out that the government most definitely collects data of real estate transactions and generally makes it publicly available in the U.S.
- mistermann 8y ago
  Do the studies you've read account for foreign money buying via proxy individuals who have citizenship, making the transactions appear domestic?
- walrus01 8y ago
  In Vancouver it's actually far worse than you describe: https://www.macleans.ca/economy/realestateeconomy/andy-yan-the-analyst-who-exposed-vancouvers-real-estate-disaster/ https://www.macleans.ca/economy/realestateeconomy/andy-yan-t... https://globalnews.ca/news/4658157/fentanyl-vancouver-real-estate-billion-money-laundering-police-study/ https://globalnews.ca/news/4658157/fentanyl-vancouver-real-e...
madeuptempacct 8y ago
Why would they divest now all of a sudden? As far as I know most of the Chinese money went into Toronto houses anyway, though I am not sure why. As far as SF - everyone there seems to think they will never lose money on real estate and it will pick back up within a year or two whenever it drops. SF was weird to me - I expected it to be a huge city, and it's this town with a cool bridge, expensive park, a bunch of overpriced houses, and a scooter app which gives you a distinct map of the "bad" neighborhoods.
ashelmire 8y ago
A weakening Chinese economy might cause a lot of property divestment in the US (and not just in the bay) if those owners need cash to get through it... it’s a good question.

This is a hot issue up in the Seattle/Vancouver area as well. tl/dr, the proper studies I’ve seen suggest foreign money doesn’t have as strong an effect as most people assume, and where it does it amplifies trends rather than drives them.

petermcneeley 8y ago
Does there actually exist a dataset that shows this? The data that you need is income, age, wealth (loans), purchase price etc. I dont even think the government has this data, and even if it did Im guessing for privacy reasons this dataset would never be made public.
- danso 8y ago
  California county assessor records are, or were public. When I worked in Sacramento a decade ago, you could look up property by address on the county website and not only get the assessed value and taxes owed, but the name of the owner and realtor, past owners, price paid and amount of loan. Seems like much of that info has been removed from the public facing website, but that doesn’t mean it isn’t available for purchase. That’s presumably how Zillow gets its data.
  - muzz 8y ago
    The records have names, but how do you correlate that with nationality? I.e., there are plenty of people with Chinese or Indian names that are Americans.
    - danso 8y ago
      It would be a statistical estimate. Some foreign buyers may have trusted go-to realtors who specialize in these kinds of transactions. IIRC, home owners have to indicate whether a home is a primary residence or being used for rental (for tax purposes). All these factors may make the statistical estimate more accurate with reality.
      - petermcneeley 8y ago
        Is this not a valid estimate? "The study found that two-thirds of all sales of detached houses in the University Endowment Lands, Dunbar and Point Grey neighbourhoods were purchased by buyers with non-anglicized Chinese names. That group purchased 88 per cent of houses priced at more than $5-million." https://www.theglobeandmail.com/news/british-columbia/vancouvers-housing-market-fuelled-by-chinese-buyers-study/article27064577/ https://www.theglobeandmail.com/news/british-columbia/vancou...
        danso 8y ago
        Sure, though that study was done in Vancouver, and their laws about real estate records being public record might be different than California or the other U.S. states (the article mentions only the methodology regarding Chinese names). You asked if there was a dataset that could be used in studying impact of foreign buyers; I was just pointing out that the government most definitely collects data of real estate transactions and generally makes it publicly available in the U.S.
mistermann 8y ago
Do the studies you've read account for foreign money buying via proxy individuals who have citizenship, making the transactions appear domestic?
walrus01 8y ago
In Vancouver it's actually far worse than you describe: https://www.macleans.ca/economy/realestateeconomy/andy-yan-the-analyst-who-exposed-vancouvers-real-estate-disaster/ https://www.macleans.ca/economy/realestateeconomy/andy-yan-t... https://globalnews.ca/news/4658157/fentanyl-vancouver-real-estate-billion-money-laundering-police-study/ https://globalnews.ca/news/4658157/fentanyl-vancouver-real-e...

madeuptempacct 8y ago

Why would they divest now all of a sudden? As far as I know most of the Chinese money went into Toronto houses anyway, though I am not sure why. As far as SF - everyone there seems to think they will never lose money on real estate and it will pick back up within a year or two whenever it drops. SF was weird to me - I expected it to be a huge city, and it's this town with a cool bridge, expensive park, a bunch of overpriced houses, and a scooter app which gives you a distinct map of the "bad" neighborhoods.

ashelmire 8y ago

A weakening Chinese economy might cause a lot of property divestment in the US (and not just in the bay) if those owners need cash to get through it... it’s a good question.