A Humorous Take on Foreign Buyers Driving Up Prices

Over in the New Yorker (where the issue of foreign buyers is more substantial than a few vague anecdotes):

Stop Complaining That I, Zathbog of Planet Cibwarv, Am Inflating U.S. Housing Prices

I’m told there’s a familiar narrative that unfolds whenever you try to buy property in a cosmopolitan American city these days. You find a place that you like, put in a bid that’s well above the asking price (just to be safe), and prepare to celebrate, even though the place itself isn’t very nice. It actually pretty much sucks. But it’s a place, and it’s sort of within walking distance of some stuff, so you’re excited. Then you get a call from your broker, who says that you’ve been outbid. “Don’t tell me,” you say. “Yup,” she replies. “It’s yet another alien gazillionaire parking cash in American real estate as a hedge against the volatile economy of his home planet.” This story must be getting old, but you have to stop complaining. It’s simply how the intergalactic economic system works now.

I understand your frustration—really, I do. Because of alien magnates like me, you can’t afford to own property (or even part of a floor of a property) in the city where you work and live. And it’s not like you’re middle-class or anything. You and your spouse make a lot of money at the corporate jobs you took so that you could afford to live in neighborhoods full of competing chain pharmacies and consumer banks. You’ll just have to come to grips with the fact that you’re not rich enough. You could look into the interstellar mining industry, where I made my gazillions, but—oh, wait, I forgot, your spaceships are awful and can’t even get to the star systems with valuable deposits. Never mind.

Read the rest…


About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

33 comments:

  1. 1

    Hoards of Seattle Homes are Being Sold to Wealthy Chinese

    “…They’re coming by the dozens to buy foreclosed properties in downtrodden cities in Florida and Nevada….”

    http://usatoday30.usatoday.com/money/economy/housing/story/2012-04-03/us-homes-lure-chinese-buyers/53977638/1

    That’s why I read the NWO rag news lies, occasionally even their lie articles slip out nuggets of truth….they’re coming in by the dozens? My gosh, Seattle is facing a giant storm of less than a dozen foreigners grabbing up our scarce inventory…..but wait, the article says they’re buying foreclosed, down-trodden. Seattle must be the place, the best 1920 old museum shacks for $500K you’ll find anywhere in America.

    Sometimes I have a sabbatical on NWO Rag news, separating lies from facts is depressing. I’ll join the Millenials playing apocalypse “end of the world” video games, to cheer me up :-)

  2. 2

    RE: softwarengineer @

    Its an Old 2012 News Story

    Hasn’t changed much from today I bet, albeit with the Chinese economy in a recent tail-spin [we’ve stopped buying so much from them]; this old news article isn’t as gloomy as today.

  3. 3
    Blurtman says:

    Vancouver, BC, Canada?

  4. 4
    Blurtman says:

    At the local Sammamish Safeway, it is not unusual to hear Safeway employees speaking to Chinese shoppers in Chinese.

  5. 5
    Erik says:

    When I sold that kirkland place, the first offer was full price cash. After that, we could say we had an offer. That definately pushed my sale price up.

  6. 6
    Blurtman says:

    Chinese investors spent $22 billion on American real estate in 2013, and $17.2 billion on Australian real estate. The U.S. National Association of Realtors recently released a report saying, like in Australia, China is the biggest source of foreign investment.

    http://www.huffingtonpost.ca/2014/08/27/foreign-real-estate-ownership-canada_n_5718705.html

  7. 7

    RE: Blurtman @

    Did You Read Your Article Blurtman?

    Chinese spend billions? Where is that in writing in your article?

    I took a snippet from your news article:

    “….
    In the absence of hard numbers, several Canadian studies have tried, with murky results, to quantify the impact of Chinese buyers on the housing market. The studies used methods ranging from a review of foreign-sounding last names to focusing on luxury home sales to a review of homes sold by a single agency.

    “The fact of the matter is: We don’t directly measure it now, period. There are no direct measures of foreign investment in Canadian real estate,” said Vancouver urban planner Andy Yan.

    “That is a pretty important piece of the puzzle that we need to understand when dealing with housing issues across the country…”

    I get so tired and depressed reading NWO Rag Lies I switch to apocalypse video games of the end of the world to stress reduce like the Millenials….you should join me Blurtman ;-)

  8. 8
    Blurtman says:

    By softwarengineer @ :

    RE: Blurtman @

    Did You Read Your Article Blurtman?

    Chinese spend billions? Where is that in writing in your article?

    – It’s directly above the chart titled “Top countries for investment in U.S. residential real estate market
    (in USD billions).”

    And yes, the article represented both sides of the hypothesis.

    Re: games, I have been hooked on Rome Total War for years. I always am using the MacBook when watching the flatscreen, and so when really bored, play games. If you know a few good ones for the Mac, let me know.

    Frankly, I could care less about who buys the homes as long as they pay and pay.

  9. 9
    sleepless says:

    Does EU QE means lower T-notes interest? Which directly translates into lower mortgage rates which translates into higher prices?

    So, Draghi, doing QE, will inflate US housing prices? is Draghi a foreigner?

  10. 10
    sleepless says:

    RE: Blurtman @

    Vancouver, BC, Canada?

    every bubble eventually bursts, even CA RE bubble, one of the biggest in the world, second to only Chinese bubble…

  11. 11
    Erik says:

    RE: Erik @
    Full price offer from a foreign investor I meant…

    There is no doubt that foreign investors do drive housing prices up based on supply and demand. More demand means lower inventory and higher prices.

  12. 12
    Blurtman says:

    Erik,

    My favorite flipper is on the market.

    Purchased: 11/28/13 for $363, 700

    Listing price: $890, 500 and pending.

    Even if they put in $200k in renovation costs, that’s not bad.

    http://www.zillow.com/homes/21210-NE-6th-St,-Sammamish,-WA-_rb/

  13. 13
    Deerhawke says:

    Great New Yorker piece.

    But I am not sure if we are talking about in our area is actually a foreign real estate investor or what we could call a currency parker and visa purchaser. Example. A colleague of mine split a lot and built two brand new homes in Seattle. They had minor differences in exterior color and interior finishes, but they were basically two versions of the same thing. Two Chinese tiger-moms were circling with a local tech guy. They had a mini bidding war between them over the one with the better view and one prevailed. Two weeks later a different Chinese tiger mom came and bought the other house. Who is living there now? The pampered daughter of one and the doted-on son of the other. Both are students at local schools with very nice cars.

    Are these folks really investors? Well, to the bean-counters in the government who compile foreign direct investment stats– sure. But they are not really real estate players. It is all about putting their money into something that is going to be there despite political shifts and currency swings. They are parking their money. Evidently they can get long term visas for the kids in the deal so they are really buying an American future for their kids and grandkids.

    Think of it as the VIP suite of Ellis Island.

  14. 14
    acoustic says:

    RE: Deerhawke @
    Yes, this.

  15. 15
    Evelyn says:

    I loved this article! Hilarious.

  16. 16
    sleepless says:

    RE: Blurtman @

    Erik,

    My favorite flipper is on the market.

    Purchased: 11/28/13 for $363, 700

    Listing price: $890, 500 and pending.

    Even if they put in $200k in renovation costs, that’s not bad.

    I, actually, remember this one. I saw it for sale as a foreclosure or REO a couple of years ago. Pretty good job, BTW…

  17. 17
    Jay says:

    The seller has a giant hot tub in the back yard, but it is not in the included items list on the Residential Purchase and Sale Agreement, on Page 1. But since I didn’t ask my agent to say it explicitly that I don’t want the hot tub to be included, my agent said that the seller can leave it behind. Is this true? Sellers only have to remove things that are in the “not included list”. That’s annoying.

    How much is it to remove a big hot tub? How much work is involved?

    Thanks.

  18. 18

    RE: Jay @ – Jay, nice hijack! ;-)

    Yes, that’s very probably true (only a judge could decide the issue, and God help you if you’ve spent the time and money to get in front of a judge over this dispute). I’d bet you could get it removed – and even make $50! – if you put up a “Giant Hot Tub 4 Sale Cheap – U Pick Up” ad on Craigslist. Good luck!

    P.S. Thanks for the blog post idea. This is yet another example of the fact that transactions have risk. We think of risk in terms of money. But there are other valuable things in life, like time and effort. The risk here? That the seller would leave behind a giant, hideous, bacteria-ridden, heavily used hot tub in the backyard. Yuck. What a bummer. Again, good luck.

  19. 19

    RE: Jay @

    Often we leave some things as optional and discuss it with the actual buyer after acceptance vs making a big deal of it in the listing and contract. Especially items the seller doesn’t want to warrant as being in good working order or ones that some buyers will want more than others. Often the buyer doesn’t ask for something if there are multiple offers, meaning they don’t want to lose the house over the item, but they would like to have it if the seller doesn’t want to remove it.

    When it is my buyer client I just make the buyer’s desires clear AFTER they win in multiple offers. “Buyer would prefer the hot tub be removed prior to closing since it is not included in the purchase and sale agreement.” or “Buyer would love it if the hot tub stays if the seller has no use for it.” This as an email vs a contract change.

    As to what happens if the seller is supposed to remove it and doesn’t…hard to force people to do things. If it’s a vacant property at the time you make the offer and the hot tub is there, it is usually there at closing whether it was specifically mentioned as included or not. Often, as example, people don’t note the garbage disposal is included, but the seller doesn’t take it away either. Every item is not always nailed down in the contract.

    Usually people just put it up for free on Craigslist and someone comes and takes it away. Sometimes that is the seller and sometimes that is the buyer after closing. If it works then you can usually get rid of it for free pretty quickly.

  20. 20
    Blurtman says:

    RE: sleepless @ – Yes, a very nice remodel. The rumor is that the former owner OD’ed in the place. I had walked around the property when it was on the market. the garage was falling part (with Pink Floyd banner displayed in window). The wrap-around decks were decaying. The sports court was thrashed. Inside looked generally OK. Nice parquet floor. It is on a quiet and formerly dark street but they are developing the slope across the street and took out a lot of trees letting in the sunlight. It is a unique design. I really like it.

    Here is another great remodel: http://www.zillow.com/homes/for_sale/49088314_zpid/days_sort/47.611778,-122.054289,47.60955,-122.059229_rect/17_zm/1_fr/?view=map

    The dude bought it for $359,000 at the end of 2011, lived in it for quite a while, and then commenced to remodel it the last year he lived there. A wonderful remodel job, and he sold it for over $1 million.

    In general, this part of Sammamish reminds me a bit of parts of Marin, except for the weather, of course.

    Leave the trees, fellows, and the neighborhood looks so much better.

  21. 21
    Jay says:

    RE: Craig Blackmon @ – I read that putting an ad like that on Craigslist can be a risk too. If a stranger comes to your house to remove the hot tub, and is seriously injured at your property, then you are responsible for the accident, which can be VERY COSTLY!!

    Another thing, can sellers back out after MA? My agent said that I asked too many questions, and the sellers are threatening to kill the deal after mutual acceptance. That sounds crazy to me. I thought that can only happen if the seller’s agent messed up, right? Can I sue them if the sellers kill the deal after MA?

    Thanks.

  22. 22
    Jay says:

    Agents are ALL ROTTEN!!

  23. 23

    Short answer: No. Sellers cannot back out.
    Longer answer: There’s always room for argument when it comes to contracts. But as a general rule, only the buyer has the ability to avoid the obligations of the contract (via various contingencies). Seller’s are bound, period. And if they refuse to honor their obligation to sell, yes a lawsuit is the solution. If you are headed down that path, I encourage you to get an attorney on board now.

    Final thought: You should think about using Quill next time. You are exactly the sort of consumer who benefits from access to an attorney (inquisitive, want to know what’s going on, want to know your legal rights and obligations, etc.).

    OK Ardell, now regale us with a few paragraphs of your personal experiences… ;-)

  24. 24

    By Craig Blackmon @ :

    Short answer: No. Sellers cannot back out.
    Longer answer: There’s always room for argument when it comes to contracts. But as a general rule, only the buyer has the ability to avoid the obligations of the contract (via various contingencies). Seller’s are bound, period. And if they refuse to honor their obligation to sell, yes a lawsuit is the solution. If you are headed down that path, I encourage you to get an attorney on board now.

    Final thought: You should think about using Quill next time. You are exactly the sort of consumer who benefits from access to an attorney (inquisitive, want to know what’s going on, want to know your legal rights and obligations, etc.).

    OK Ardell, now regale us with a few paragraphs of your personal experiences… ;-)

    Craig,
    I’m sure you’re an excellent attorney and a fine real estate broker, but Seattle Bubble is not supposed to be about real estate brokers telling people to avail themselves of their services. It’s a slippery slope. I know we could all benefit from more business. But if I start spouting off about ” You should think about hiring me next time” and then Ray Pepper does it, and then Kary Krismer does it and then Ardell does it, each of us saying ” You should think about using me next time”, what will that do to Seattle Bubble?
    Maybe you should think about keeping the advertising in the advertising.

  25. 25

    Thanks for that feedback, Ira. Note that I gave Jay an answer to his question first, I didn’t simply use the opportunity to plug the business. I thought the plug was appropriate in this context and intentionally kept the entire comment short and sweet. But I can understand your comment. Thank you.

    On the other hand, my business is unique. Yours, Kary’s, and Ardell’s are all simple variants on the 100+ year old model. Ray’s isn’t a business as much as a self-described hobby. In contrast I’m seeking to build a scalable brokerage that will, every time, offer every consumer the opportunity to save substantial money – not because “everything is negotiable” but because the offered prices beat the competition. And my business provides additional value on top of that (an attorney) that is unique in the industry. So on that basis I see value to the consumer in letting people know about Quill Realty, it’s not just me self-promoting.

    Please forget that I am an “attorney.” When I post here or anywhere else these days, I do so as a broker and only as a broker.

    Thanks again, Ira. Message received and I will continue my efforts to “tone down” my pitch.

  26. 26
    m-s says:

    You mean your pitch is “toned”, not “toned down”. Sounds pretty muscular to me.

  27. 27

    By Craig Blackmon @ :

    Thanks for that feedback, Ira. Note that I gave Jay an answer to his question first, I didn’t simply use the opportunity to plug the business. I thought the plug was appropriate in this context and intentionally kept the entire comment short and sweet. But I can understand your comment. Thank you.

    On the other hand, my business is unique. Yours, Kary’s, and Ardell’s are all simple variants on the 100+ year old model. Ray’s isn’t a business as much as a self-described hobby. In contrast I’m seeking to build a scalable brokerage that will, every time, offer every consumer the opportunity to save substantial money – not because “everything is negotiable” but because the offered prices beat the competition. And my business provides additional value on top of that (an attorney) that is unique in the industry. So on that basis I see value to the consumer in letting people know about Quill Realty, it’s not just me self-promoting.

    Please forget that I am an “attorney.” When I post here or anywhere else these days, I do so as a broker and only as a broker.

    Thanks again, Ira. Message received and I will continue my efforts to “tone down” my pitch.

    I agree. People buying and selling houses should know about all the options available to them, including Quill. But, again, it would be a lot nicer if we could hear about Quill from people other than the owner of the company. The way you make it sound, you should be getting a Nobel prize.
    A year or two ago Ray Pepper was on here pontificating about how anybody who didn’t use 500 Realty was an idiot. It didn’t sound good, and neither does your evangelism. You’ll tone down your pitch. After you use an additional paragraph to suggest that there’s no self promotion going on, that it’s your mission to save the world from the old, tired model of real estate. Also, there’s no reason to put down the other people who sell real estate who participate on Seattle Bubble. We’re all part of the same community. I think just the fact that we participate on Seattle Bubble makes us a little different. Besides which, you don’t really know anything about how we do business. You’re making a big assumption that we’re all the same, and all operate in the same, antiquated way that Quill has evolved from.
    I understand that you will continue your efforts to tone down your pitch. Otherwise, you will be continuing an age old tradition of carnival barkers, used car salesmen, and real estate agents to use any occassion to sell their wares.

  28. 28

    RE: Ira Sacharoff @

    People buying and selling houses should know about all the options available to them, including Quill. But, again, it would be a lot nicer if we could hear about Quill from people other than the owner of the company.

    Trust me, Ira, I am working on it. Boy am I working on it. Easier said than done. Much, much easier.

    And thanks for the kind words and honest feedback.

  29. 29

    RE: Ira Sacharoff @ – Ira, I’m not trying to “put down the other people who sell real estate who participate on SB.” Did you interpret “simple variants on the 100+ year old model” to be an insult? It certainly was not meant as much, merely a comment on the real estate industry. Sorry for any misunderstanding.

    Any chance we could continue this discussion over on Rain City Guide? I really am interested in knowing what the term “alternative brokerage” actually means – and, on the flip side of the same coin, what term would be used to describe Redfin or other “new model” firms. I’d love it if you weighed in – and bonus points if you can describe your own real estate practice and the term that best describes it. Don’t you agree that consumers benefit if everyone is using the same language?? Thanks Ira!

  30. 30

    By Ira Sacharoff @ :

    Craig,
    I’m sure you’re an excellent attorney and a fine real estate broker, but Seattle Bubble is not supposed to be about real estate brokers telling people to avail themselves of their services. It’s a slippery slope. I know we could all benefit from more business. But if I start spouting off about ” You should think about hiring me next time” and then Ray Pepper does it, and then Kary Krismer does it and then Ardell does it, each of us saying ” You should think about using me next time”, what will that do to Seattle Bubble?
    Maybe you should think about keeping the advertising in the advertising.

    I didn’t realize the topic shifted from worrying about the nationality of buyers. But I certainly hope I’ve never come out and tried to “advertise” in one of my comments. That said, I am the only agent here that offers a ride to clients in a 1989 Ford Ranger, but that is now only by special request, and requires a special waiver to be signed. The Ranger is semi-retired.

    On the hot tub comments, unfortunately the company I used has gone out of business. Probably because they offered me money (which I didn’t accept) to take away what I didn’t want.

    http://blog.seattlepi.com/realestate/2008/05/02/the-greatest-real-estate-blog-piece-in-the-world-a-k-a-how-to-get-rid-of-your-unwanted-hot-tub/

  31. 31

    RE: Kary L. Krismer @ – You rank and ruthless shill, Kary! You know how popular that truck model is to ‘Hawks fans… :-) On that note: Go ‘HAWKS!!

    Wanna mosey over to RCG and give me your thoughts Kary on the topic??

  32. 32
    Jill Rivas says:

    RE: Jay @ 17 – Just in case you need to fill out Purchase Sale Agreement Form, you may find a blank Purchase Sale Agreement you need in this site PDFfiller. I found mine through http://pdf.ac/aneHep. Hope you find it useful.

  33. 33
    Jill Rivas says:

    RE: Ardell DellaLoggia @ 19RE: Craig Blackmon @ 18RE: Jay @ 17 – Great article. Thanks for the info, you have made it easy to understand. BTW, if anyone needs to fill out Purchase and Sale Agreement, I found a blank form here http://pdf.ac/aneHep. This site also has some tutorials on how to fill it out and a few related blank forms.

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