The last several years has shown the tremendous effect Chinese investors are having on the Silicon Valley real estate market. The influx of Chinese investment in Palo Alto real estate in particular has many factors which together create the basis for this real trend. The abundance of educated people and universities, the already diverse culture and population, the ease of immigration possibilities, the fundamentally sound federal and state government, and the mecca of the greatest high-tech companies in the world form the confluence of primary elements for Chinese investment in Palo Alto.
The Chinese Political System and Real Property Market are Unknowns
The Chinese government gives many reasons to owners of Chinese real estate to be nervous. An unstable balance of government power, an untimely crackdown in certain areas of the government, or a parade of horribles which could be around any corner in China all give rise to many investors to diversify their assets in other parts of the world. The Chinese government is still not making international friends because of their consistent manipulation of their currency, the remenbi. Additionally, the Chinese financial system has strict controls, fixed interest rates, and many international economists refer to it as government-wide practice of financial repression. Without going into sordid details in effect the Chinese government has attempted to setup a financial system designed to keep all of the countries money in the country. But wealthy investors have found ways either through Hong Kong or other avenues to divest and get their money out of China. Although it’s just a drop in the bucket it is a start of things to come, and they are looking to Palo Alto, California.
Importantly, now the real estate marketplace in many parts of China are stagnant or even declining due to over-building or over-speculating or both which is further eroding faith of the wealthier Chinese population. The result of this is that they are now looking for ever more ways to invest outside China’s borders – and the Silicon Valley is a likely target.
Palo Alto is an Ideal Silicon Valley Town to Attract Foreign Investment
The center of Palo Alto is world renowned Stanford University which consistently attracts some of the greatest minds in the world both in the student body and the faculty. Stanford has bred many of the high-powered high-tech companies in Silicon Valley. Additionally, many of the largest and most powerful venture capitalists are located in Palo Alto and its close neighbor Menlo Park. The combination of Stanford, the existing world famous high-tech companies like Google, Facebook, LinkedIn, and Apple Computer, and the venture capital community are a powerful magnet to Chinese investors and consumers many of whom believe property values in Palo Alto, like most of the Bay Area will continue to rise and remain stable going forward.
Another amazing statistic about Palo Alto is the fact that the public school standardized testing scores are some of the best in the United States as a whole. Each public elementary school, middle school, and the two high schools perform as well as any public school district in the country. This reason has also driven more investors to purchasing Palo Alto real estate including Chinese nationals.
To A Chinese Investor Palo Alto Looks Like a Town on the Rise
Some of the wealthiest high-tech entrepreneurs are buying real estate in Palo Alto – and actually building homes and living there. Facebook’s Marc Zuckerberg, Google’s Sergey Brin, and Yahoo’s Marissa Mayer are just a few world famous high-tech executives who happen to live in downtown Palo Alto. To an outsider who wants to be part of the Palo Alto scene and enjoy the benefits of this modern day mecca these facts only add fuel to the fire. Palo Alto has an incredible year-round climate, it has one of the highest educated populations in the world, and offers the world’s most culturally and economically diverse citizenry anyone can find anywhere this side of Manhattan.
When Chinese investors are looking for places to park their money outside of China they are looking to the United States and many of those are looking to Palo Alto for the reasons described above. There is no mystery as to why, the only question that remains is will it ever slow down or stop?
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Contact Esquire Property Management Group for property management services in Palo Alto or to discuss any questions or investment property strategies in Palo Alto or any surrounding Bay Area community. Palo Alto is a long-term home run investment – take time now to see how you can get involved.
David currently is the broker/owner of several real estate related businesses which manage and maintain 300+ client properties on the San Francisco Peninsula.
Trust, transparency, and performance guarantees are the foundation of these businesses. David challenges anyone to find a PM professional that offers services similar - extensive education, customer service, and performance guarantees.
David also provides consulting for his clients on property development feasibility, construction, and complex real estate transactions.
David has authored a published law review article, two real estate books, and over 120 real estate blog articles.
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