The Changing Demand for Silicon Valley Real Estate from Chinese Buyers

By Audrey Sun

In recent years, Chinese buyers have represented, and continue to represent, a strong and important part of the Silicon Valley buyer pool. Although certain regulatory, financial, and logistical factors have changed some of the characteristics of these buyers’ focus, there is no denying that it would be a fool’s errand to ignore this important segment of potential bidders. Given that the DeLeon Team is the top marketer of Silicon Valley real estate to the Chinese community, and as someone who was born in China before immigrating to the U.S. to attend school at Valley Christian and U.C. Irvine, I enjoy a great vantage point from which to evaluate some emerging trends. Like many immigrants, I have experienced the American dream and truly appreciate the diversity and welcoming spirit of this great nation.

Direct Purchases by People Living in China

Until about five years ago, we saw a very strong demand for Silicon Valley real estate from people living in Mainland China. This was due to a confluence of different factors, such as the:

1. Stability of Silicon Valley real estate market; 2. Appeal of great schools; 3. Overall desirability of this area and its weather; 4. Economic opportunities associated with Silicon Valley’s striving economy; and 5. Restrictions by the Chinese Central Government on the purchase of multiple investment properties in Tier-1 cities in Mainland China.

This demand was so strong that Michael and I, along with other members of the DeLeon Listing Team, made multiple trips to China over the past few years to meet with various real estate agents, potential investors, government officials, and buyers. For several years, The DeLeon Team even had an office in Beijing.

However, over the past five years, President Xi’s actions have significantly restricted currency migration from China to the United States. More precisely, these measures have resulted in more strenuous enforcement of laws that were already on the books.

These factors, paired with the recent pandemic, have resulted in a reduction in direct investment by Chinese nationals living abroad.

Continued Strong Efficacy of Chinese Marketing

Despite the reduction in buyers coming directly from China, we continue to see extremely strong results from our marketing of our listings to the Chinese community, which includes television commercials, radio commercials, newspaper ads, and social media marketing, all in Chinese and geared towards broadening the promotion of our listings.

Naturally, this begs the question: why is this marketing still so effective in light of the significant restrictions on currency migration? The answer is simple: the very robust Chinese community that is already here is trading up or experiencing changing needs.

Increasing Geographic Diversity

Five to ten years ago it seemed that many buyers coming over from China focused on particular areas such as Palo Alto and Cupertino. Growing up in China, even well before I ever came to the United States, I had heard of these two cities. As strange as it sounds, I remember talking about these two almost mythical cities with my friends as we imagined streets paved in gold and multi-millionaires clad headto-toe in Louis Vuitton on every corner. Back then, Palo Alto was the most prestigious “name brand,” and my friends and I certainly loved designer labels.

While real estate agents are appropriately prohibited from steering clients towards certain areas or cities because of their race, we did experience many people who came here with a preconceived notion of where they wanted to live. In some cases, they already had friends or family living in those cities, while in other cases, these were simply cities wellknown to their friends or family members in China.

The buyers from China who bought homes in Silicon Valley over the last ten years are now more established, they understand the area much better, and are ready to begin to trade up from their current residences. Although Palo Alto is still a very popular place to purchase because of its great schools, convenient location, and strong sense of community, a growing number are also considering neighboring cities that may not have been on their radar ten years ago.

DeLeon’s Future Efforts in Chinese Marketing

As a fixture on Chinese TV, host of a Chinese radio show, and one of the top Mandarin and Cantonesespeaking real estate agents in Silicon Valley, as well as being someone immersed in the community, I have noticed a particularly strong shift in Chinese buyers interested in purchasing homes in Los Altos, Menlo Park, and Atherton, among other areas.

The increased interest in these communities should not be surprising. They all have fantastic schools, great communities, and they love and encourage diversity. For example, Menlo Atherton High School’s motto is “Strength in Diversity.”

I am really proud to work at DeLeon Realty. Michael and Ken believe in diversity, inclusion and opportunity for all – just look at the makeup of our company’s leadership team and overall employees. This focus on inclusion extends to the way we market our listings. Rather than limit our marketing to the Chinese community to cities that “traditionally” (a dangerous word) attract Chinese buyers, we market all of our homes to these buyers and everyone else. Beyond being the right thing to do, it also attracts more competition and higher prices for our sellers.

Audrey Sun (Top Right) regularly appears on Chinese talk shows focused on Silicon Valley real estate. She is fluent in Mandarin and Cantonese, which helps present our properties to certain buyers more persuasively.