[abbasmehdi]

These are list prices, we are finding list and sale prices are quite different in the Bay Area. Folks list low on their realtor's advice to ignite bidding wars. And bid buyers do. On the plus side now we are hearing from our realtor and others that prices are stabilizing (i.e. not going up as fast, but definitely not coming down). Still hugely unaffordable for most.

[equalarrow]

Also, even if you can bid, cash is king. So, not only is everyone driving the prices up, but the winners are usually all cash. I don't know anyone who has a few million in the bank, ready to move on property. Sadly..

[bduerst]

Yep, but that's because they're mostly foreign investors.

>About 60 percent of foreign buyers paid cash, compared with one-third of domestic buyers, according to the 2014 Association of Realtors survey.

http://www.sfgate.com/business/networth/article/How-and-why-...

[arjie]

Well, according to the article 3/5 of foreign buyers paid cash, 1/3 of domestic buyers paid cash, and 1/5 of all buyers are foreign cash-only buyers.

1/5 (all buyers) = 3/5 (foreign buyers)

So one in three buyers is foreign. Which means two in three buyers are domestic, which means two in nine buyers is a domestic buyer who pays cash. So that puts the number of cash-only domestic buyers higher than foreign investors. That means that it's roughly the same absolute number of domestic cash-only and foreign cash-only (allowing some fuzziness in the numbers), not quite mostly foreign cash-only.

We can safely then conclude that the article linked does not support the claim that the people bidding cash are mostly foreign.

[bduerst]

Buying != Bidding. You don't just bid on one property and buy it.

When you're in an auction market, which has a segment of bidders that are more accustomed to bidding over with cash, you're going to see them push auctions into the cash over range more frequently, even if they aren't the ones ultimately buying.

[arjie]

A reasonable hypothesis. Since there is no evidence that domestic cash-only and foreign cash-only buyers have different bidding patterns, we can then conclude (contingent on your latest hypothesis) that the link with the stats does not support the idea that it's mostly foreign buyers bidding up the price.

[bduerst]

It's not a hypothesis - it's part of auction theory for markets that use absolute and reserve auctions. Why are you so adamant in attempting to redefine this to dismiss it?

[abbasmehdi]

Absolutely. Unfortunately I know many, many who have a few tens of millions; unfortunately^2 I am not one of them. People say it's the Chinese buyers with the all cash offers, but I see locals do it left, right, and center with money made in SV within the last few years.