Silicon Valley's Hottest Neighborhood for Foreign Buyers: Old Palo Alto
PALO ALTO (KPIX 5) -- The Bay Area housing market is red hot, but one neighborhood in Silicon Valley is even hotter for one particular group of buyers: Old Palo Alto.
DeLeon Realty CEO Michael Repka calls it Palo Alto's most prestigious community. It also has the highest percentage of foreign home buyers.
"I think for the same reason everyone's attracted - the weather's wonderful, the schools are fantastic, the business climate is the best in the world," said Repka.
KPIX 5 toured a century-old estate at 369 Churchill Avenue, which is on the market for just under $40 million. It has been completely renovated and features 5 bedrooms, 7.5 baths, a wine cellar, gym and modern technology across 11,000 square feet.
Repka says his foreign clients aren't the same kind he was used to seeing.
"About five years ago, there were a lot of Chinese buyers and foreign buyers looking to buy up inexpensive properties in the million to $2 million dollar range in this area. That's dried up dramatically, but what we have seen are companies that are bringing executives over to the United States, helping facilitate the purchase of what we call luxury properties," said Repka.
DeLeon Realty says the demand from foreign buyers for high-end properties is so strong, it has hired a Mandarin speaking interior designer to help clients get situated and walk them through the often complicated permit process for remodeling.
"When they first move here they will feel very uncomfortable with the environment, so first I will just show them around and show them where to shop for the furnitures," said DeLeon Realty Interior Designer Shihan Xu. "And if they need construction work, like remodel their house, I will help them find vendors."
Across the US, international real estate activity is down 36% this past year, according to the National Association of Realtors. The group says tighter capital controls in China and low housing inventory are partly to blame.
Repka says two-thirds of potential buyers who've come to see Churchill Avenue home are Chinese. We looked at how it stacks up to a $38 million property in Hong Kong. A 6 bedroom, 3 bath luxury unit is about one-third of the size.
"By many people's standards, homes in Palo Alto are astronomically expensive, but when you look at the world class cities, whether it's Hong Kong or London or other places around the world, in some ways, it's kind of a bargain."