Let’s Double Our Check our Numbers: What Percentage of Palo Alto Home Buyers Are Indeed Chinese?

March 1, 2007

My previous post on what impact the recent stock market fall might have on the Palo Alto real estate market generated some interest and questions. Friend and reader Greg asked about the (apparently) surprisingly high percentage — 25% — of Chinese buyers in the Palo Alto real estate market, a fair question considering the premise of my article, namely, that the Chinese stock market could have an effect on Palo Alto home prices. He also asked about what the percentage of home owners might be of Indian descent.
Mea culpa; in my previous life, I was taught better: don’t just throw out numbers, but document their source. The 25% is an estimate that’s been floating around our industry, provided by one of the title companies; I’m not sure which one.

Is that number right? I decided to go straight to the source — county records — and do a quick, random, and admittedly unscientific search. I downloaded 1000 Palo Alto home records (yes, I’m one of those people who does things like that) and skimmed through the first 300, noting whether the owner was likely Chinese, Indian, or other.

The results? Not exactly 25%, but definitely in the ball park: 18% Chinese, 3% Indian, and 79% other (including 3 lonely fellow Dutch families like mine!)

Percentage of Palo Alto home buyers that are Chinese, Indian, and other

18% obviously ain’t 25%, but it’s certainly in the right ballpark, and I’d say it certainly passes the initial back-of-the-envelope consulting sniff test, if I may mix metaphors.
My study wasn’t particularly scientific: all 1000 records were centered around one home (because that’s how my county data provider gives the data) and I didn’t filter by date. A more rigorous look at the numbers would have chosen only recent home transactions — say, in the last two years — and would have chosen homes at random throughout Palo Alto. It’s possible, for instance, that the neighborhood from which I drew the homes has a higher or lower percentage than average. I suspect the 18% is a fairly accurate number for Palo Alto as a whole, but that the percentage of recent home buyers who are Chinese is higher.

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Written by Kevin · Filed Under Demographics, Palo Alto, Real estate | 2 Comments