Author Topic: Sotheby's wants to sell this house to China  (Read 4357 times)

MrsK

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Sotheby's wants to sell this house to China
« on: November 19, 2014, 08:42:28 AM »
I rent a lovely home in a very high price housing area in California.  Seriously, a shack costs about $700K.  So in my mailbox yesterday was a flyer from Sotheby's (a real estate firm) saying that they can market this house to 5000 buyers in China with lots of cash.

Obviously, this was for the home owner.  Here is the part that steams me.  In a market economy, the whole capitalist thing everyone is America is supposed to worship, home values should be dependent on what the market will bear.  So the homes around here that have been for sale for years because they want $1 million + should have to come down in price.  But there are too many tricks in the bag, banks holding inventories, investors with bags of cash and now selling off for Chinese vacation homes.

The current home we rent was built by the family we rent from in 1950 for about $20K.  When the original owners died, they left it to their daughter.  She has put about $100K in remodeling into it and so it is quite nice.  In CA, she is still paying almost no property taxes as she still gets to use the original sale price to base her taxes on . . . .

I guess my question is do you think it is treason to sell off the best parts of America for the highest price?  Treason is too strong of a word, but I can't think of another one. 

gimp

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Re: Sotheby's wants to sell this house to China
« Reply #1 on: November 19, 2014, 01:54:30 PM »
If it makes you feel better, we can turn around and use that money to build sweatshops in china. Yay! Everyone has stuff to complain about!

MrsK

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Re: Sotheby's wants to sell this house to China
« Reply #2 on: November 19, 2014, 02:05:54 PM »
If it makes you feel better, we can turn around and use that money to build sweatshops in china. Yay! Everyone has stuff to complain about!

Yes, very true!

NoraLenderbee

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Re: Sotheby's wants to sell this house to China
« Reply #3 on: November 19, 2014, 04:11:45 PM »
It's nothing new. China is just the latest in a list of countries that invest in US companies and real estate.

I do find it distasteful.

arebelspy

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Re: Sotheby's wants to sell this house to China
« Reply #4 on: November 19, 2014, 04:32:59 PM »
In a market economy, the whole capitalist thing everyone is America is supposed to worship, home values should be dependent on what the market will bear.

But that's exactly what's happening.

It's going for what the market will price it at.

You just want the market to be smaller.  Where do you draw the line?  One has to live in the US to buy it?  Already in California?  In that city? That neighborhood?

The fact of the matter is we have a global market now.  I see nothing wrong with that, and many benefits.  Hopefully it means it will eventually even out wealth between various areas of the globe and raise the average standard of living.
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Radagast

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Re: Sotheby's wants to sell this house to China
« Reply #5 on: November 19, 2014, 09:50:26 PM »
On the flip side, they will contribute a massive amount of property taxes and pay for additional utilities and services that they will basically never use.

I will retaliate sometime in the future by buying an over-valued shitacular brick and concrete condo with questionable plumbing and fresh white paint in a second tier Chinese city!

expatartist

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Re: Sotheby's wants to sell this house to China
« Reply #6 on: November 20, 2014, 12:38:12 AM »
This is happening in many parts of the world. Hong Kong, Vancouver, and many parts of California have seen housing prices skyrocket as a result: http://thediplomat.com/2014/08/chinese-investors-fuel-california-housing-bubble/

There aren't many domestic options for investing in China, and it can be difficult to invest outside of the country, so housing prices have shot through the roof. This is causing huge problems here: a man is supposed to own a home before getting married, and this is becoming an unattainable dream for many.

Related: if you're buying real estate in the US, here are some areas to avoid - prices have shot up thanks to Chinese buyers: http://money.cnn.com/2014/07/23/real_estate/chinese-home-buyers/

v10viperbox

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Re: Sotheby's wants to sell this house to China
« Reply #7 on: November 20, 2014, 01:06:09 PM »
This is happening in many parts of the world. Hong Kong, Vancouver, and many parts of California have seen housing prices skyrocket as a result: http://thediplomat.com/2014/08/chinese-investors-fuel-california-housing-bubble/

There aren't many domestic options for investing in China, and it can be difficult to invest outside of the country, so housing prices have shot through the roof. This is causing huge problems here: a man is supposed to own a home before getting married, and this is becoming an unattainable dream for many.

Related: if you're buying real estate in the US, here are some areas to avoid - prices have shot up thanks to Chinese buyers: http://money.cnn.com/2014/07/23/real_estate/chinese-home-buyers/

I would say that 50% of the homes in the 92130 zipcode where I am, are selling to oversea's or non resident buyers. Prices are up quite a bit as well, they area all rentals now or just cash holdings. When the government removes or vastly increases the investment limit for visa's I imagine it will start to drop back down.

sol

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Re: Sotheby's wants to sell this house to China
« Reply #8 on: November 20, 2014, 01:22:44 PM »
That cnn article makes it sounds like Chinese buyers are after US homes as investments, not as homes.  They're looking for areas with stable economies and lots of renters, fixing the places up, and renting them out at a profit. 

So the real question, if there is money to be made doing this, is why US investors aren't doing it?  If it's just a matter of available capital, then that bodes poorly for the US economy if we can't even afford to invest in our own properties anymore.

Maybe it's because US investors are still looking for 8%+ ROI and the Chinese are happy to get 5%?  In that case, I see no problem at all with letting foreign nations own all of our worst investments.

daverobev

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Re: Sotheby's wants to sell this house to China
« Reply #9 on: November 20, 2014, 01:31:18 PM »
Guess what, OP. American companies have been taking over foreign firms for decades. Should that be allowed, or should all the multinationals be split down into their original companies?

The truth is that patriotism is ridiculous, it's just culture plus racism. IMHO your 'question' is thinly veiled racism.

sol

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Re: Sotheby's wants to sell this house to China
« Reply #10 on: November 20, 2014, 01:49:04 PM »
The truth is that patriotism is ridiculous, it's just culture plus racism. IMHO your 'question' is thinly veiled racism.

Maybe it was, but that's certainly not the only way to look at this issue.

My concerns have more to do with the economic viability of my home region.  I want the place where I have chosen to live to be prosperous, because I think prosperity helps to generate a better quality of life for me and my neighbors.  If my neighbors cannot afford to buy homes in my neighborhood, but people from far away can, then that suggests that my home neighborhood is on the decline relative those places.

That concern has nothing to with either nationality or race.  It applies on the scale of countries or states or cities or subdivisions.

johnhenry

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Re: Sotheby's wants to sell this house to China
« Reply #11 on: November 20, 2014, 03:19:09 PM »
The truth is that patriotism is ridiculous, it's just culture plus racism. IMHO your 'question' is thinly veiled racism.
I want the place where I have chosen to live to be prosperous, because I think prosperity helps to generate a better quality of life for me and my neighbors.

.......then that suggests that my home neighborhood is on the decline relative those places.

Fair enough.  I don't disagree with anything you said.  As you say, that's one way to look at it.

My way of looking at it is: "I want the place where I happen to live to be prosperous, because I think prosperity helps to generate a better quality of life for me and my neighbors.

Since I happen to live on earth, I'm not concerned with one particular "home" country, state, city, or neighborhood staying prosperous as much as I as I am seeing prosperity increase for as much of humanity as possible.

I live in a nice neighborhood in the United States.  By global standards, everyone in my hood is rich.  I recognize that if prosperity around the globe increases significantly, my current neighborhood will likely decline in prosperity relative to the rest of the world.  And I wouldn't wish for anything less.  Of course "relative" is the key word.  Because if everyone living in poverty around the world became just enough more prosperous to live with basic human needs my neighborhood would naturally become relatively less prosperous when compared to those folks... since their circumstances improved greatly.

Of course the word prosperous has a great deal of "relativity" built in because it compares the standard of living for one to that of the rest.  Since I'm concerned with increasing prosperity for as much of humanity as possible, that necessarily means that I'm concerned with decreasing the (relative) prosperity of others, including myself.  Yes, I'm perfectly content to maintain my current standard of living, but lose my status of being rich by global standards.  Nothing would make me happier.  Even if it meant Chinese or Cambodians could afford to live in my hood!!

MrsK

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Re: Sotheby's wants to sell this house to China
« Reply #12 on: November 20, 2014, 03:27:51 PM »
Guess what, OP. American companies have been taking over foreign firms for decades. Should that be allowed, or should all the multinationals be split down into their original companies?

The truth is that patriotism is ridiculous, it's just culture plus racism. IMHO your 'question' is thinly veiled racism.

OK, I will raise the question up a level so as not to focus on one race--this was just the latest example I have come across.  The real estate market in many areas is a rigged game--big sacks of cash, no matter where they come from, make it hard for real people (vs big banks, foreign investors, etc) to buy a home. 

Should communities be owned by the people who live in them?  And as for patriotism, what happens when the majority of property owners in your community are not citizens of this country? 

Is this just the next phase of colonialism? 

lhamo

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Re: Sotheby's wants to sell this house to China
« Reply #13 on: November 20, 2014, 04:10:22 PM »
Let me guess -- you are in the Bay area, maybe Palo Alto?

They are not buying these homes purely for investment purposes.  Though certainly they don't want to lose money.  But they are primarily buying these homes so that they can move their families to the US to get great public schools and get into Stanford (or Harvard, or Yale, or Princeton....).  And then be part of China/the world's next generation ruling class.

One of my son's best friends did this.  The father is a wealthy artist.  Family moved to Palo Alto last year.  Their home here was probably worth 3m or more (large villa in a relatively central area).  Not sure if they sold it, but a nice house in Palo Alto would probably have been cheaper and at least as nice. 

Welcome to the global economy.

gimp

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Re: Sotheby's wants to sell this house to China
« Reply #14 on: November 20, 2014, 06:56:07 PM »
I, for one, welcome immigrants with a bunch of money and education and aspirations. Even if it makes buying a house here in the bay area even less possible. At least we get nice schools and tech startups out of it.

I'd be very curious to know the actual percentage of homes being bought as investments by foreign nationals here in the bay area. I suspect that number is actually very low. Maybe a bit higher in mountain view / palo alto / cupertino, but overall...

expatartist

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Re: Sotheby's wants to sell this house to China
« Reply #15 on: November 20, 2014, 07:40:34 PM »
Welcome to the global economy.

+1
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