January 28, 2008
Recap: What’s The Scoop On Foreign Investment In San Francisco?
"I know that there are a lot of sellers who want that to be true, and I know that the Europeans are definitely buying in New York," said Malin Giddings, who specializes in upscale San Francisco real estate for TRI Coldwell Banker. "But we see very few foreigners buying [here]."
∙ What’s The Scoop On Foreign Investment In San Francisco? [SocketSite]
∙ Foreigners get a piece of the real estate pie [SFGate]
First Published: January 28, 2008 8:35 AM
Comments from "Plugged In" Readers
I don't think foreign investor is (or has been) a big factor in SF's RE.
However, even if it is a factor....but wouldn't it be obvious that European buyers buy NYC and Asian buyers buy SFO (and LAX)?
Posted by: John at January 28, 2008 10:42 AM
Malin has spoken!!
Posted by: Sleepiguy at January 28, 2008 10:46 AM
I've repeated this a lot, but: SF is the second home to many Asians and Pacific Islanders, and I have seen that demographic buy a lot in the Bay Area...
The only Europeans I seem to run into a lot are Russians. (especially Jewish Russians)
not to say there aren't a lot of Europeans in SF, but nothing like the #'s of Europeans I see in Manhattan or Florida or caribbean Islands like St. Maarten or Mexican areas like Playa del Carmen.
Posted by: ex SF-er at January 28, 2008 11:02 AM
We are the #4 city in foreign investment, according to businessweek:
Posted by: "Dave" at January 28, 2008 11:11 AM
I see the same types of articles also down in the Palm Springs (The Desert Sun) newspapers and magazines that are trying to calm nervous second home owners like myself. Basically, the storyline is "Don't Worry!". "Rich foreigners are buying up used and new homes and condos because they are now ""cheap"" because of the dollar".
If this is true, then the market is in worse shape than I thought, for these are some of the worst sales numbers down in the desert that I have seen in 25 years. Imagine how bad the sales numbers would be without these so-called swarms of "rich foreign investors".
Posted by: Morgan at January 28, 2008 11:16 AM
Swarms of wealthy Canadians and Mexicans are flooding open houses all across San Francisco. Even though prices are trending down ever so slightly, thereby exposing new buyers to substantial downside risk, the increased value of their foreign currency insulates foreigners from this potential capital loss. Plus, five years from now when the Canadian peso returns to its usual 65-cent-per-US$ trading range, they will make a fortune in spite of any decline in the underlying asset or transaction costs.
Plus, everyone wants to live in San Francisco!
Posted by: Jimmy (Bitter Renter) at January 28, 2008 11:57 AM
I thought the mythical foreign investor was a legend, but it's not. A Canadian couple just bought my dad's house in Palm Springs over the weekend.
I kid you not, the buyers heard about the listing from a Canadian friend, flew to CA, drove straight from the airport to the house, looked around, and bought the place in cash. Even if RE prices stay flat forever, foreign investors can make sizable gains once the dollar eventually bounces back.
Posted by: anon at January 28, 2008 12:29 PM
The new San Francisco Chronice, brought to you by the National Association of Realtors
Posted by: spencer at January 28, 2008 12:29 PM
"can make sizable gains once the dollar eventually bounces back"
Yeah, in like 30 years.........
Posted by: anon at January 28, 2008 12:44 PM
I have friends in Canada, and a gay couple we know just bought a winter home in Palm Springs, and has been trying to convince friends to do the same. There are non-stop flights from Calgary and from Edmonton to Palm Springs-- it is a popular winter destination for Western Canadians. The Canadian dollar has gained 60% in value versus the dollar, and Alberta is booming with oil revenue, so there are folks who can afford to buy.
Posted by: Dan at January 28, 2008 12:56 PM
Hmmmm. I guess I should start to believe the articles in the Desert Sun newspaper. Sales have been very slow in the Desert, but perhaps the Canadians will save those who are selling down there. Why would someone from Vancouver want to buy in San Francisco however?
Posted by: Morgan at January 28, 2008 1:24 PM
This does happen, I can attest. I am in the process of finding a RE Agent with experience for a Euros-based transaction. Interested? Email me: firstname.lastname@example.org
Posted by: Interested at January 28, 2008 1:57 PM
There is no relevance between snowbirds buying in PalmSprings/PalmDesert and Euros buying in SF.
Posted by: as at January 28, 2008 2:34 PM
well considering that new and existing home sales have been down by double digits percentages for the last, something like 36 months, it appears the only people buying are the foreigners
Posted by: Badlydrawnbear at January 28, 2008 3:24 PM
Malin doesn't see foreign investors, because she doesn't trade in the kind of product they're looking for(new construction)
The Infinity Sales Office has said that their highest percentage of buyers are empty nesters and foreign investors from Asia and the Middle East.
Posted by: AnonAgent at January 28, 2008 9:25 PM
socketsite grabbed the wrong quote from the article, which was decidedly negative about the impact of foreign buyers on the SF market. i think the following from the chron article is more representative.
"The top five countries whose residents are buying U.S. real estate are, in order, Mexico, the United Kingdom, Canada, India and China, the Realtors' report noted.
Almost half of international buyers acquire U.S. properties as vacation homes. They show a stronger preference for condominiums and apartments than home buyers in general, and tend to focus in major markets, such as New York, Los Angeles and San Francisco."
since the bulk of buyers are from mexico and asia, SF and LA are well placed geographically. also, these foreign buyers are obviously wealthy and will usually put their money into blue chip areas, which SF has in spades.
as the article noted, i can see a coordinated effort between SF RE agents, and the foreign agents, steering buyers to the new developments in SOMA and south beach, as condos are convenient for 2nd residences.
and finally, the businessweek article referenced elsewhere on this thread points to foreigners who invest in property other than vacation homes, such as commercial and multi-units. again, a foreigner with enough money to invest overseas will gravitate towards blue chip areas, as they are more focused on future appreciation and have large enough down payments to negate negative cash flows.
basically, as the rich get richer they tend to push prime cities like SF in the same direction, only now it's a global phenomena.
Posted by: AMinSF at January 28, 2008 9:30 PM
Case Shiller's November price data is out today. San Francisco SFR prices are are down 8.6% over the year and 3.2% just from October to November. If all these foreigners are buying up San Francisco houses, it sure isn't showing up in the sales or price figures. Or maybe they are bidding down prices because they are such sophisticated negotiators.
Posted by: anon at January 29, 2008 6:46 AM
It's like Opera Talent.
If you are working the Europe/East Coast Circuit, it's one plane ride too far.
Oddly, Philadelphia looks better.
We are the Viet Nam of the United States.
Too far away to really care.
Ho Chi Min has the last Ha Ha.
Posted by: kathleen at January 29, 2008 10:30 PM