The rise of the Chinese consumer on the global stage has had a tremendous effect on world markets, shaking up everything from the price of milk powder to impressionist paintings. Now, the impact is being felt all the way in Palo Alto, the Silicon Valley town next to Stanford University.
Over the past two years, Chinese buyers have been snapping up property in the city, driving up prices and possibly contributing to an emerging bubble. Chinese nationals have tripled their share of home purchases in Palo Alto since 2011, now accounting for around 15 percent of transactions in the city according to Ken Deleon, founder of Deleon Realty, a local firm that has invested heavily in catering to Chinese buyers.
“If we have seven offers for a home here, three of them will be Mainland Chinese buyers with all cash,” Kim Heng, the Chinese-born head of Asian outreach at Deleon Realty, guessed. “We’ve never seen so much money in all the years we’ve been in the real estate business.”
Palo Alto, in many ways, is the ideal city for attracting Chinese buyers, due to its strength in three crucial areas: education, investment and immigration possibilities. Palo Alto’s public schools consistently rank among the best in the state, if not the country, and the city borders Stanford University, one of the American universities that is best-known in China. High—and rising— property values also make Palo Alto homes an attractive investment, especially for those now stymied by restrictions on multiple-home purchases in China. Finally, Palo Alto’s location in the heart of Silicon Valley, near companies like Google, Facebook and LinkedIn, offers enticing employment possibilities and, possibly, opportunities to obtain a green card. The prestige of the city—and the San Francisco Bay Area as a whole—isn’t lost on status-conscious Chinese consumers, either.