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bmwman91 says

For those that don't know, HK /= China. There is a world of difference. You cross the border from one to the other...yup, different world.

LOL! kinda like Cupertino and Gilroy...I wonder how many here been to Gilroy.. not not during just the garlic festival.

bmwman91 says

dunnross says

If you want open spaces go to New Zealand or Brazil. You can find good weather down there too.

This is not a snide remark or sarcastic question, but an honest one: Have you ever been to HK?

It does not sound like it, but I might be mistaken.

I've been there twice. Nice place.

ContStinks DeGroot says

Goran_K says

I was going to comment but Bellingham pretty much said what I wanted to say. Cupertino is not at some imaginary 15 year low.

Sales in Cupertino is at 1997 levels. That's plainly a fact.

Why would you lie to Patrick.net readers about it?

Living in the empty skulls of realtors. Rent-Free.

That doesn't explain everything. Cupertino inventory is super low, around 30-40 houses at any one time, and what is out there gets bought.

Goran_K says

That doesn't explain everything. Cupertino inventory is super low, around 30-40 houses at any one time, and what is out there gets bought.

I view the low sales as a negative, not a positive. There would be much more sales if prices were rising or even stable. People are trapped with negative equity and can't sell, while others are thinking that they can wait for it to correct later. Time will tell on this one and people will be forced to sell. Cupertino is not special. It is filled with overpriced houses. The parents can only hope to learn from the kids that are getting great scores. I predict that by the time the well educated kids are hitting 15-16 they will look at the parents and say, "Man you were just a fool for buying this crappy house for million+. It would have been cheaper to hire a tutor for me".

I'm not saying Cupertino is not overpriced, I think it is. But the demographics of the people who buy there have changed in 15 years, and their value system is a lot different than mine or yours. If you're a business man from Hong Kong, and $2,000,000 buys you a 2,500 sqft house in Cupertino, or a 1,100 sqft apartment in HK, the choice starts to make sense.

Also, low sales would generally be a negative, but this isn't a normal situation. Cupertino hasn't had new construction for a long time, and won't for the foreseeable future. Also Cupertino has become a prime location in the past 15 years. Couple both of those facts, it's natural that inventory would be low, which would mean sales numbers would be low. Low sales numbers by themselves don't explain everything as I was explaining to the "everyone is a dirty realtor" guy.

Cupertino is a light version of San Marino down here in SoCal. Another area that has a huge demographic of rich Chinese. It's a very small town, with very limited supply of housing, and whenever a home pops up on the market it's gone in 10 days or less, even if it's a 1,50o sqft ranch home built in the 50s priced at $1.2 million.

It doesn't make sense to you and I, but it makes perfect sense to them.

Goran_K says

RentingForHalfTheCost says

When someone says this, all the more reason to run! The was the motto back before the dot com implosion, and also the motto before the housing bust. When all people have to reason the over-inflated prices is "things are different", then they have nothing at all.

That's generally sound advice when the claim doesn't make sense.

But do you actually think that there should be no price difference between different cities based on real factors like location, access to jobs, great schools, safety, etc?

Should Inglewood, Compton, West Oakland, Richmond, and Cupertino just be similar priced or is Cupertino "different" in some way?

Rule #2. When someone says that they understand rule #1 but it doesn't apply to this area, again run for the hills. This is a case of 2nd derivative denial. It is the worse case of denial and where the larges losses transpire to unsuspecting newcomers. Remember, the people that want you to believe in the fairytail valuations are all on the side of taking some of your money in the transaction. i.e. Realtors, home sellers, banks, title companies, insurance, city taxes, etc.

Goran_K says

It doesn't make sense to you and I, but it makes perfect sense to them.

Another bad attempt at explaining why you should pay 2x for something. This same logic was applied by others 5 years ago and look where it got us.

And on top of the Chinese thing there does happen to be BIGGEST US MARKET-CAP CORPORATION ON THE PLANET (15% larger than Exxon right now) totally based there, and building its new mothership on the eastern fringe of Cupertino.

RentingForHalfTheCost says

I predict that by the time the well educated kids are hitting 15-16 they will look at the parents and say, "Man you were just a fool for buying this crappy house for million+.

LOL At that age...

Boys: "Heyyyy.....girls have boobs, how can I get them to let me touch them.....and I wonder how fast a car can go? Mom & dad are fools, they don't understand me!"

Girls: "So, like, Sabrina said that my hair isn't as nice as hers, and I was, like, psssh WHATEVER! That bitch probably doesn't even have a boyfriend yet. Mom & dad are fools, they don't understand me!"

You have some potentially valid points about other reasons why the housing inventory there is low. Teenagers lecturing their parents about real estate purchases, however, seems sort of unlikely lol.

RentingForHalfTheCost says

Goran_K says

It doesn't make sense to you and I, but it makes perfect sense to them.

Another bad attempt at explaining why you should pay 2x for something. This same logic was applied by others 5 years ago and look where it got us.

Okay, why don't you explain why places like Cupertino and San Marino have actually risen in prices since 2006 when every other market around he country has experienced a 25-50% decrease in price?

RentingForHalfTheCost says

Another bad attempt at explaining why you should pay 2x for something. This same logic was applied by others 5 years ago and look where it got us.

He is not trying to give an explanation for why rational people should buy there. He is explaining why the people that continue to keep prices jacked up there keep doing such an irrational thing. The "common sense" that you and most others here feel should exist in the market doesn't apply to everyone. There are enough fools with enough money that they will keep doing silly things, like paying $1M+ for a smallish house on a smallish lot in generic suburbia. School scores aside, the big draw Cupertino exerts is "because it is expensive." Once an area hits a "critical mass" of sorts with pricing, it will start attraacting attention from the masses of consumer idiots that don't understand the difference between price and value. People, and I see this a LOT in China, assume that if something costs a lot, it must be the best.***

A good analogy is moths to a flame. All of us prospective house buyers are the moths, and Cupertino is the flame. Clearly, we are all PAYING ATTENTION to Cupertino, and there are plenty of moths that are dumb/bold enough to fly right into it without regard for the consequences.

*** My fiancee's cousin owns a wine bar / restaurant in Shenzhen. He had lived in New Zealand & other western nations for quite a while before moving back to China, and he is far more western than he is Chinese at this point. Last time I was visiting (soon to be) in-laws, I spent a good amount of time talking to him. He stocks wines from all over the world. However, it irritates him that "any Chinese guy with some money" comes in and blindly wants "the most expensive French wine he stocks." That's it. There is no thought process; "just give me wine: most expensive, from France." Branding and price are all that matter. He has tried to get them to try some very good tasting wines from CA and NZ, at a fraction of the price, but they won't even consider it.

He says that their tastes for even more expensive stuff, like audio equipment, is the same. "Give me Bang & Olufsen." It doesn't matter what kind of music they listen to, or if they plan to use the stuff for movies, they "want the best, give me B&O."

Yes, this is anecdotal. However, there is plenty of truth to statements about wealthy Chinese buying seemingly overpriced real estate in botique areas. There really is no thought process beyond, "I want the best....what costs the most, and how many people that I know have heard of this place?" Maybe a little more thought goes in since they look at API scores, but it is really an incomplete metric. As anyone that works with data knows, summing up something complex like a human education system with a single number is kind of silly. It can tell you SOMETHING, but it rarely tells you EVERYTHING. Looking at API scores doesn't imply much of a though process beyond, "how much $, and where?"

Exactly! I'm glad I'm not the only one who notices that. I work with some fairly educated people from Asia. This is of course anecdotal, but I feel still makes the point.

I drive a white Hyundai, it cost me $17,000. I think it's a great car. Every mid-level manager who is asian at my firm drives at least a Mercedes E-Class, and some of them drive some ridiculous cars including a Lotus, and a few Porsche Turbos.

These guys don't make much more money than me, some even less. We all hangout after work, and go to Yardhouse, or some other area to drink on Friday. It's like a pimp daddy's parade going out of the parking lot (except for my hyundai I suppose).

So I asked one of the guys one night, his name is Feng, "Feng, why did you end up getting a Porsche? Why not a BMW or a Lexus?"

His reply, "BMW and Lexus is so common. You know how much Porsche costs in Singapore? My same car cost double the amount in Singapore because of import duty. It's cheap here man, it's a steal."

That's the type of mentality we're dealing with. Even though the car is $100,000+ for us, and we think that's ridiculous, they think it's cheap because it's so much more expensive to buy in Singapore, HK, and Taiwan, etc. It's hard to explain, and based on our values and logic, it doesn't make sense. But to them it makes perfect sense.

Goran_K says

It's hard to explain, and based on our values and logic, it doesn't make sense. But to them it makes perfect sense.

Yup. It is a different culture, and a different mentality. Status is huge, and while to some extent this is true here, it is the law there: status is purchased, and no money = no respect. It isn't right or wrong, just different. And when lots of folks with that cultural mentality move in here, it can be really irritating since it is somewhat contrary to our culture and makes things like buying houses more difficult.

bmwman91 says

Yup. It is a different culture, and a different mentality. Status is huge,

There's a whole lotta regular folks from those places for whom status is not The Religion. But they're not the ones immigrating to Cupertino. So 'Tino has become a "self-selected" population of a certain sub-Culture.

With state budgetary woes, my crystal ball says there may be more parcel taxes coming in Fortress areas.

B.A.C.A.H. says

There's a whole lotta regular folks from those places for whom status is not The Religion. But they're not the ones immigrating to Cupertino. So 'Tino has become a "self-selected" population of a certain sub-Culture.

Agreed... may not have ventured to other parts of the BA area... stuck in the enclave of Cupertino/Palo Alto till end of days.

Goran_K says

So I asked one of the guys one night, his name is Feng, "Feng, why did you end up getting a Porsche? Why not a BMW or a Lexus?"
His reply, "BMW and Lexus is so common. You know how much Porsche costs in Singapore? My same car cost double the amount in Singapore because of import duty. It's cheap here man, it's a steal."

LOL! maybe its for the mother in law... you just wait until he has to get a break job on the 7xxi... its not cheap.

Did you check the API? It is about 90% Asian. Flies around shit. Asian around expensive real estate. End of story. Do you want to live comfortably? Check the API, and make sure the percentage of Asian is not 90%.

B.A.C.A.H. says

bmwman91 says

Yup. It is a different culture, and a different mentality. Status is huge,

There's a whole lotta regular folks from those places for whom status is not The Religion. But they're not the ones immigrating to Cupertino. So 'Tino has become a "self-selected" population of a certain sub-Culture.

Of course. Chinese folks are like anyone else...hard working and trying to get by at a reasonable level. We have status whores here in the US, and they have theirs. Their population is so much larger than ours that they have a seemingly unending supply of status-douches that can afford to come here & compete with our home-grown-status-douches!

Goran_K says

RentingForHalfTheCost says

Goran_K says

It doesn't make sense to you and I, but it makes perfect sense to them.

Another bad attempt at explaining why you should pay 2x for something. This same logic was applied by others 5 years ago and look where it got us.

Okay, why don't you explain why places like Cupertino and San Marino have actually risen in prices since 2006 when every other market around he country has experienced a 25-50% decrease in price?

Not enough sales. The majority of people have enough savings to weather the storm better. That doesn't mean that there isn't a storm though. Eventually, the people that lost their jobs or took a pay cut, or have to move for a job, will need to sell. I know a few families in Cupertino that fit that bill and are hunkering down. One has a husband out of work buring through his 401K, and a wife that has changed job too many times to count. Things are not all good for everyone. They are not saving, but eating into saving trying to keep the house they purchased in 2006 making sense.

Not enough sales?

What? The standing inventory in Cupertino is less than 2 months. What gets to market sells, and it sells fast.

This thread makes it sound like Cupertino is immune to what is happening nationally. It is NOT. Just because it is holding up better in the last 2 years is a small window of time. Trying to explain it by using the Asian, or high tech workers excuse is just grasping in my view. People are not able to just throw money way. No one is saying they are expecting houses to appreciate, even in Cupertino.

Remember, what used to be a 1.14million medium for SFH in Cupertino is now down to 1.0million. I explain that drop with the same reasoning as the rest of the nation. Too much price for not enough value, good schools included. Sure, it is not the 33%, but crap it is still 140K drop! Considering the 20% down formula that is a nasty investment kick in the ass. It is not all happy learning kids and smiling parents down in Cupertino. Don't get fooled.

Here is what used to be

http://www.1siliconvalley.com/cupertino-housing-market-update-april-2007/

Here is where we are now

http://www.zillow.com/local-info/CA-Cupertino-home-value/r_4281/#metric=mt%3D19%26dt%3D2%26tp%3D5%26rt%3D8%26r%3D4281%26el%3D0

So they were $1.1m in 2006, and $1.1m in 2011.

RentingForHalfTheCost says

Trying to explain it by using the Asian, or high tech workers excuse is just grasping in my view. People are not able to just throw money way. No one is saying they are expecting houses to appreciate, even in Cupertino.

Back in 1990 Cupertino had 20% asian.. and during the 90s Asian population increased.. prices still declined. The inflow was due to HK being handed over mainland, so many skipped town.

So history has shown any increases in Asian population didnt translate to higher prices. One can also say the same regarding the Vietnamese who done a pretty good job fostering small business growth in the other side of Santa Clara County.

If your a migrant Bostonian or from New Hampshire... your pretty much blind to all this.

Draw the graph back to 1985.. and see the biggest housing bubble of all time.. never in our local history can you point to a period of 10 years where prices went up 200-300%.

Neither inflow of migrants nor the tech industry can sustain this.

Goran_K says

So they were $1.1m in 2006, and $1.1m in 2011.

Yup, so some people paid 2x rent for 5 years and have nothing to show for it. Add the inflation factor and that 5 years got pretty expensive. In 2006 you know there were realtors going crazy telling people they'd be fools not to buy. ;)

thomas.wong1986 says

RentingForHalfTheCost says

Trying to explain it by using the Asian, or high tech workers excuse is just grasping in my view. People are not able to just throw money way. No one is saying they are expecting houses to appreciate, even in Cupertino.

Back in 1990 Cupertino had 20% asian.. and during the 90s Asian population increased.. prices still declined. The inflow was due to HK being handed over mainland, so many skipped town.

So history has shown any increases in Asian population didnt translate to higher prices. One can also say the same regarding the Vietnamese who done a pretty good job fostering small business growth in the other side of Santa Clara County.

If your a migrant Bostonian or from New Hampshire... your pretty much blind to all this.

I hate to say this, though I don't believe the prices were driven up soley by Asians, I do think Chinese from mainland are much more readily to pay premium for educations and houses b'cos few of my Chinese friends here, who do not own a house, and most of them own a house in the premium neighborhood .... think they are able to cut down other expenses more efficiently, like hardly any shopping, no or few vacations, like cutting off international travel (including visiting their home country once every few years ...), not much eating out (or the ability to count on google food to feed the whole family instead of buying your own food) ... while the rest (including me) are too spoilt to have that life style.

E-man says

Nice looking chart for Cupertino.

500K to 1.1M... up over 100% happens every 10 years.

Seems stock option and lending impacts prices..

Wong,

Then explain 90% Asian kids in Cupertino schools. You gotta back it up with the facts.

Essentially. coming from Chinese, I will practically dismiss your comment in this case.

Nobody says

Wong,
Then explain 90% Asian kids in Cupertino schools. You gotta back it up with the facts.
Essentially. coming from Chinese, I will practically dismiss your comment in this case.

LOL! so easy to fall for my name.. Actually, im white and not asian.. German ancestry.

Regarding your question.. a coworker of mine.. he is Jap-American.. parents been here for decades. His wife also. Both grads from Cupertino back in the day. Two kids now go to Cupertino High. Like them, many have been around here for a long time. There many Asian in my HS back in the day as well. Some Chinese, some Japanese, Korean, Viet, etc etc.

As for facts.. look to the US Census data back in 1990. 20% were Asian, today 25%. Are you factoring the white baby boomers who live in Cupertino, and considering their children moved off to live elsewhere.

Why do they swarm to Cupertino and overpay.. beats me. But it wont last long. They certainly better not ask for a bail out as prices tank.

SparrowBell says

I hate to say this, though I don't believe the prices were driven up soley by Asians, I do think Chinese from mainland are much more readily to pay premium for educations and houses b'cos few of my Chinese friends here, who do not own a house, and most of them own a house in the premium neighborhood ....

If you don't think the Chinese can crash the housing market, take a look at what happened in Hong Kong back in the late 90's. Chinese surely like to gamble with their real-estate, so, prices in places like Cupertino will crash just as hard as they escalated.

thomas.wong1986 says

They certainly better not ask for a bail out as prices tank.

You kidding me? That is exactly what they will ask for when it tanks. They will call attention to this site and the people that were saying "Things are different in Cupertino". They will cry saying they thought patrick.net was mostly honest people trying to help each other. Their realtard, who appeared nice, will become their enemy as they remember the rush job that was done on them. "You better buy this one quick because more Asians families are on the next flight, and Apple stock just went up another 100B in value!". They will say they though that Cupertino housing never goes down. It has great School scores and that justifies everything!

People will not admit what buying a property in the BA really means. It means you are gambling for house price appreciation. If you don't get it, then you will cry like everyone does.

Renting for Half Cost,

Your Post is Hilarious! For those who that happens to, another planeload is already disembarking on the tarmac. For Cupertino and other Gaokao Culture places in The Fortress, the Sky is The Limit.

It is different in The Fortress.

I live in a nice area of north Cupertino. It is overwhelmingly Chinese. I rarely see any white people in my neighborhood. Some of the Chinese are citizens, but even most of those were born and raised in China or Taiwan.

I grew up in West San Jose and went to Junior High and High School in Cupertino. This was in the seventies. Cupertino was pretty much a dump, Rancho Riconada was kind of a dangerous place, and the schools were shitty (police removing guns in lockers at Hyde Junior High) or OK but not great (maybe Monte Vista was OK).

The schools haven't gotten any better. The Chinese and a relatively small group of Indians raised the API scores because of their fairly extreme focus on school.

In my neighborhood there are many kids but you wouldn't know it. You almost never see them except for Halloween. They are inside doing homework, playing the piano or doing something else educational. Almost every house has a piano. Piano stores across the US and in Santa Clara County are doing very badly but they are doing very well in Cupertino.

The Chinese come to Cupertino for the same reason many other places are segregated. They know people in Cupertino so they move there. Standard snowball effect. Also, there are a lot of homes in Cupertino between 1 and 1.5 million. That's actually relatively inexpensive compared to Saratoga or other city's with high API scores (Los Altos, Palo Alto, etc.).

So to address the original question, I think there aren't a lot of movers here and therefore there isn't a lot of inventory. They come and they stay, usually for 20 years or more until there kids are out of high school. The prices aren't that high, relatively speaking.

Still, I don't think any city is immune. And the stats you have can easily distort reality, especially in a small community, depending on what houses sold in the recent past. If north Cupertino sells a few more than south Cupertino, the numbers get skewed.

Lastly, Chinese have a habit of becoming landlords. If they do move, they often rent instead of sell.

Biff

thomas.wong1986 says

Why do they swarm to Cupertino and overpay.. beats me. But it wont last long.

B.A.C.A.H. says

Renting for Half Cost,

Your Post is Hilarious! For those who that happens to, another planeload is already disembarking on the tarmac. For Cupertino and other Gaokao Culture places in The Fortress, the Sky is The Limit.

It is different in The Fortress.

whats with your obsession with immigrants and cupertino? You repeat the same damn thing in every post.

Get over it Bill.. Apple to Apple comparison...

Apple has been around since the mid- 70s. With all the other great stuff going on in Cupertino-Santa Clara County back then, prices didnt magicaly double-triple in a few short years.

That being said, clearly home buyers were much more smarter back than and knew how to buy and save, vs the idiots today.

Serpentor says

whats with your obsession with immigrants and cupertino? You repeat the same damn thing in every post.

Maybe its a joke... Just like the joke about selling the Brooklyn Bridge. Or was it just a joke...

http://en.wikipedia.org/wiki/George_C._Parker

George Parker (1870–1936) was one of the most audacious con men in American history. He made his living selling New York's public landmarks to unwary tourists. His favorite object for sale was the Brooklyn Bridge, which he sold twice a week for years. He convinced his marks that they could make a fortune by controlling access to the roadway. More than once police had to roust naive buyers from the bridge as they tried to erect toll barriers..

Goran_K says

If you're a business man from Hong Kong, and $2,000,000 buys you a 2,500 sqft house in Cupertino, or a 1,100 sqft apartment in HK, the choice starts to make sense.

What utter nonsense. If you are a business in HK with $2,000,000, sitting in Cupertino on dead equity, who is minding the business back in Honk Kong?

thomas.wong1986 says

Apple has been around since the mid- 70s.

The Apple of today is an order of magnitude larger in terms of operations than the 2000s, and that was several orders of magnitude larger than the 1970s.

With all the other great stuff going on in Cupertino-Santa Clara County back then, prices didnt magicaly double-triple in a few short years.

For one, home prices did shoot up like crazy as the baby boom hit the market. My family was in El Cerrito at the time and I saw it first-hand as a kid.

But the post-Apollo & post-Vietnam spindown did put the Valley into something of a recession, from what I've come to undertand about the era.

The south bay had much more room to grow back then, both infill and overflow down the 85 and towards Milpitas.

Also, home prices haven't doubled or tripled here "in a few short years".

Per the chart above, prices have doubled from $550,000 in 1999 to $1.1M today, but the goddamn interest rate has in fact been halved since 1999.

Frankly, there are entire square miles of much nicer places to live in Fresno compared to Cupertino, eg:

http://binged.it/zh4cma

so I'm not saying Cupertino is the ultimate in housing, but it is what it is -- the home of a $460B market cap company (10 years ago it was $4.6B and kinda circling the bowl after the iMac craze faded and OS X was still being fixed up), plus a suburb of the Los Altos Saratoga professional enclave axis.

I thought prices were unsupportable in 2000-2001 and I was kinda right but I hadn't banked on Greenspan letting mortgages run free 2002-2004 nor did I see the rise of GOOG and Facebook 2004-now replace the former wealth-dumping events of the dotcom era (1995-2000).

The silicon valley is turning into a club for the cashed-out. Demand is willing but the supply is weak, and that's not even getting into the alleged Chinese influx, of which I know nothing about.