Boom on the eastside fueled by recent immigrants?
I think this topic deserves a posting of it's own. I'd like to hear thoughts from more folks.
EastSider wrote:Not to start of a racial debate, but.....
My observation has been that most of the people who come to a open-house (or a new construction site) on the eastisde seem to be from outside the US. I guess this is understandable given that MS hires so many engineers from outside the country.
anforowicz wrote:I think this is a valid observation. In my opinion a significant part of real estate market on the eastside is fueled by immigrants who had no previous experience with real estate in their home countries.
I came to work for Microsoft 2 years ago from Poland. I had no previous experience with a real estate market and no previous experience with living in the USA. It seemed reasonable to assume that the prices and appreciasion I am seeing are normal. I almost bought a house in 2006, but found this blog prior to making a serious offer.
Lukasz
Comments
When I first moved to the US, and started at MS, I was astounded to see CNBC playing from suspended monitors not just at MS lobbies, but at dotcom foyers as well. I thought every American had a stock portfolio and could memorize AAPL, AMZN, CSCO, INTC, ORCL, MSFT, SUNW and YHOO closing prices. Considering our TVs were jammed/infiltrated by odiously gaudy, excessive 'let's gawk at the rich and famous' shows exported by the major networks, this fixation on money did little to counter our beliefs all the Americans were rich, and Microsofties were no different.
Go to a MS cafeteria and overhear "oh, how's your new Mercedes? Did you and your children enjoy your Italy trip over spring break? Have you decided between Lakeside and the Bush school?" and wonder what it is you're doing wrong funding your retirement, paying for daycare, and paying down your house.
I hope the immigrants buying are from rich families, or come from Hong Kong, and aren't suckered into thinking these house prices are the norm, the way I was suckered into thinking those NASDAQ stocks were.
I'd say that due to the traffic situation, more people want to live closer to where they work (Microsoft); and Bellevue has obviously taken off like mad.
And no, I don't think that any amount of immigration will continue to artificially prop up RE values from here on out - anywhere in the US - EVEN Seattle/Bellevue.
Interesting. In the recent past, I've been hearing similar things from people of Chinese & East-Indian origin --- they think the "action" is in their home countries.
That's a valid consideration, but banks have been more willing lately to extend credit to non-citizens. With the way credit scoring is currently calculated, I doubt it would take more than a year of earnest effort to build up a good credit rating.
Americans can get loans a year out of bankrupcy - if an immigrant plays the game right there's no reason to believe they'd be inelligible. Most of the Asian families I've known have been VERY willing to help out other members. In this case it's not even a matter of cash, it's just helping them establish credit.
Oddly, I have noticed that disproportionate number of new sales into established neighborhoods have had Asian names - and likewise, the recent KC Notices of Trustee Sale seem to follow a similar trend.
I'd like to see some aggregate stats on this before drawing a conclusion.
Just curious --- where did you notice this trend? Is there any easy way to get some agrregate stats?
There likely are some significant demographic trends in recent home purchases. The problem being that whenever the trends have a racial or ethnic component someone is going to object to it being reported as such.
I think you'll find that in a few years China will own more of this country than you could ever have imagined.
I don't think that is true. Companies could find the talent they want if they were willing to pay more. Even MS only pays in the 65th percentile of salaries for software developers (but they want the 90th percentile of talent). Google pays even less than MS from what I hear.
Bringing in foreign workers to keep wages low also removes incentive for Americans to go into technology. It will only exasberate the problem.
Apparently you've not paid attention to Vancouver, BC's 1985-1999 large influx of Hong Kong investor/emigres. Are you saying they would prefer to move to Vancouver rather than Seattle? I could see that...
Is it your position that people from higher cost of living cities (London, Tokyo, Vancouver, etc.) wouldn't lower themselves to move to our area for work opportunities? That only immigrants with lesser means would bother to come over to "the New World"?
Agreed. It is pretty hard for a foreign national from China to get a green card for the US. The Hong Kong immigrants came to Canada partly because of Canada's lax immigration laws.
In the late eighties, and nineties many educated people immigrated from Hong Kong fearing the Chinese takeover in 1997. Real Estate in Hong Kong is very, very expensive and for many people it was easy to buy houses in Vancouver.
I'm not sure who the 'new immigrants' are, but it is very difficult to get into the US in spite of tons of skilled jobs which can't be filled. H1-B visas for 2008 disappeared in half a day. Canadians in certain job fields can get TN visas under the NAFTA agreement.
Currently, people are saying it will take Chinese and Indians 15 years to be eligible for green cards under the quota cap for each country.
I highly doubt that new immigrants are making any dent in RE. More likely tons of speculators.
Hmmm.....I'm not sure if I agree with this when it comes to the Eastside RE scene.
First-gen immigrants (that work in MS & other hi-tech companies in the area) prefer homes that are
- Newer (less than 10 years or so)
- Located in a very-good school district (very important factor for most Asians & East-Indians) -- eg: Sammamish, Issaquah
A good % of the buyers of such homes are first-gen immigrants. I notice this almost everytime, when I go to an open-house of such a home.
The funny thing is -- I know several East Indians (2nd generation) who grew up in the Fairwood neighborhood of Renton. 70s shag carpet & exterior decor out of a John Hughes teen movie? Oh yeah!
Of course, that was the "in" thing when their first-gen parents bought those houses, 20-25 years ago.
On the other hand, take newer communities such as Woodbridge or Redmond Ridge as examples --- lots of Asians, East-Indians & other first-gen immigrants (with most of them working in the high-tech sector).
Culturally, it is my understanding that Indians and Chinese traditionally value land ownership more than Western cultures. Considering that these two nations have had significant growth in the past 15 years, and that a lot of their technically educated (ie: more wealthy) citizens have come to the US for work, it might make sense that they are buying at the margin and are responsible for some of the price increase/speculation in the US. Obviously, the Japanese had an RE bubble 18 years ago, so it's possible that some of their RE wheeler dealers moved to other countries (US, England, Australia, Spain, etc) and helped spur on the bubble as well.
It would be interesting to see a comparison of Asian immigrant population (including H1B holders) and Housing stats to see if this theory bears any fruit.
Of course, I still lay the principal blame for this bubble squarely at the feet of irresponsible lenders, debtors, and the Fed, and a lack of oversight by Congress and the Administration, but the cultural impacts of a global economy shouldn't be ignored.
Good points!
All the news about a bubble could potentially discourage some of them from buying a home, even if they can afford a mortgage.
I don't stand a chance if this is the norm.
I will hold my cards and wait for the right deal. This market is new to me and I am surprised that the east side is still selling.
We know that there are other markets and that too much debt is no fun.
I don't know what to tell you. I went to a dinner where the Governor spoke, about 300+ in attendance, all business people. Most of the questions were about "when can we get more H1B Visas in here!" and "fix the educational system, we're getting nothing but dingbats out of this thing!"
Seriously. Slightly anecdotal, but I'd say our educational system is up shit creek at the moment. India alone produces 3X the amount of patents we do currently.[/code]
I don't doubt that business people want more H1B's. It is very difficult for an H1B to switch jobs. Those high switching costs mean less risk to the business. It also means lower future costs. Raises can be smaller because the H1B working can't just get a higher paying job. Add to that the fact that they are often very smart and capable and you have a business person's dream employee.
But H1B's depress local wages. The high switching costs and ability to give smaller raises keeps the average wages for that type of job lower. Those wages are used in statistics that are used to calculate wages of US citizens doing the same job. The increased supply of workers also helps push wages down. When engineering and science wages grow more slowly than the wages of other professions, future workers do not consider that career path. That means either higher salaries for the few remaining national workers, more imported workers, or industry leaving the country. Asking for more H1B's is a short sighted business solution that will result in bigger problems down the line. If those businesses want the best workers then they should pay the most.
I am a product of public education. I credit my parents with the value I received more than the schools I attended. Government isn't the answer to everything.
In an age where so many US kids are making videos, blogging, and building their own web pages, it's absurd to suggest that they aren't ramping up to the technology. It's even more absurd to claim that Chinese and Indian youth are somehow better geared for IT with their limited infrastructures. As soon as Asian workers no longer have a cost advantage, you'll hear about how Africa is the last bastion of tech talent.
I've worked with good Asian IT folks, and bad ones. Computer skills, it seems, are colorblind. I've been able to discern no difference on average between the talented US code monkeys and and the Asian ones (except they seem to produce more female IT folks than we do).
You don't need a green card to buy a house. It is risky (you have to leave the country within 14 days (sic!) after loosing a job), but I know 2 people who did this nevertheless (apparently without knowing or considering the 14 days rule). In their case it will take 1-2 more years to get a green card, so the risk is not so great.
Lukasz
The neighbors on the other side of me are all from Russia (single guy who works for (or used to) AT&T Wireless, his brother, and their parents. They all pooled their $ to buy the new $600K house a few years ago and live in it together, with the brother living in the MIL unit above the detached garage. They put all of their eggs in the housing basket, and they're all driving 15-year-old Nissans.
IMO, this kind of living arrangement (multiple employed relations sharing one dwelling) will help to keep prices on the high side.
In my neighborhood north of MS, I have yet to see any softening in the market.