New Summer Trip
2005.05.30
Okay, so my jet lag still isn't over. I woke up at about 3:30 am
(local time) today. I remember a short while ago I was going to bed
at 3:30. Ah, the college years. Those were the days ...
Anyway, I did go back to sleep, barely, for a few more hours before
waking up to the drudgery of Shanghainese real estate.
Oh, did I mention that many of my parents' friends are investing in
real estate in China, especially Shanghai? And that as long as my mom
& I were back this summer they wanted us to take a look around for a
few of them? *grumble* silly favors for friends */grumble* It's
actually kind of amusing, real estate here.
First off, the entire system is quite odd. There are very few single
homes in Shanghai city, and most of the time, realtors deal with
apartments. Apartment homes are owned or leased, but not by the
building owners, but by their actual owners, usually through
realtors. So I may own an apartment, but the hallways are owned by
the building company or something.
Second, very unlike the US, there is not a one-to-one ratio in the
realtors and buyer/seller. Instead of the buyer & seller each hiring
a realtor to represent them (well, at least this is the way it works
when my parents bought their homes), the seller kinda sortof announces
that they are selling/leasing to one or more realtors. Then the
realtor who can bring them the best price gets the deal. So at the
same time, the buyer also deals with multiple realtors, although they
may not all show you the same place, but sometimes the place they
wanted to show you will turn out to have been sold the day before by
someone else. This also creates a slight conflict of interest on the
part of the middle-man, since their comission is obviously higher if
they can agree to a higher price for the seller, and their goal is to
convince the buyer to agree to the highest price possible.
Third, also very unlike the US, there isn't a grand table listing all
recent sales in the region, so you're not exactly sure what price you
should be getting. I mean, all the places in a region ask very
similar prices, and there is great variance based on the different
levels of upgrades within the family. Still ...
There are also a great difference in the real estate market in
general. For the last couple of years, the price increase of housing
in Shanghai has skyrocketed, despite a great expansion in apartment
complexes. It got to a point where, we heard, one person bought a
house, sold it in three months, and made 300,000 RMB off of the deal.
That's a tidy $37,500 off a three month investment. Not bad, I
suppose. It's so not bad it's crazy.
On the other hand, there are a great number of owners now who are
really screwed. You see, these are people who own up to a dozen homes
or so, all based of loans. The banks weren't as strictly regulated,
so they gave out all sorts of loans, knowing that they will make
returns quickly. Well, can we say "investment bubble?"
So in order to prevent that, the central government has passed all
sorts of decrees, the most recent one is that, after June 1st, ALL
owners selling a home before owning it for more than two years must
pay an extra tax. Now all these people who have tons of short-term
loans want to sell as quickly as possible before the June 1st
deadline, since they can't afford to sell later. Then there are the
people who have long term loans and can afford until the situation
stabilizes. Then there are the people who have only a few places, and
thus can totally wait it out.
Oh, the real estate situation is amusing/screwed up!
Anyway, I learned a lesson in adventuresome rides: (in order of
increasing scariness, for me:)
A) Riding with an Asian female driver (I live with one, I have
friends who are, so I can survive).
B) Riding with an Asian female driver who is on her cell phone (hey,
some people can make short calls and drive).
C) Riding with an Asian female driver who is on her cell phone and
didn't fasten her seatbelt (well, maybe if she didn't fasten her
seatbelt she'll be more cautious).
D) Riding with an Asian female driver who is on her cell phone,
didn't fasten her seatbelt, and driving a stick-shift (WTF, are
you crazy?).
E) Riding with an Asian female driver who is on her cell phone,
didn't fasten her seatbelt, driving a stick-shift in China (let me
out, let me out!)
Anyway, it wasn't that adventurous, really, since she was a pretty
cautious driver, relatively speaking. She did live for ten years in
Japan, so she has some idea of what good driving is.
Oh, and I went shopping for AA batteries today. The wall was fairly
interesting. From top to bottom, the prices for 4 AA batteries:
Duracell : 24.90 RMB == ~$3
Energizer : 9 RMB == ~$1.12
Store brand : 10 RMB == ~$1.25
Nan Fu : 7.70 RMB == ~$1 (note, pack of 5)
Everready : 3.60 RMB == ~$.45
I thought it was an interesting span of possible costs.
Okay, so my jet lag still isn't over. I woke up at about 3:30 am
(local time) today. I remember a short while ago I was going to bed
at 3:30. Ah, the college years. Those were the days ...
Anyway, I did go back to sleep, barely, for a few more hours before
waking up to the drudgery of Shanghainese real estate.
Oh, did I mention that many of my parents' friends are investing in
real estate in China, especially Shanghai? And that as long as my mom
& I were back this summer they wanted us to take a look around for a
few of them? *grumble* silly favors for friends */grumble* It's
actually kind of amusing, real estate here.
First off, the entire system is quite odd. There are very few single
homes in Shanghai city, and most of the time, realtors deal with
apartments. Apartment homes are owned or leased, but not by the
building owners, but by their actual owners, usually through
realtors. So I may own an apartment, but the hallways are owned by
the building company or something.
Second, very unlike the US, there is not a one-to-one ratio in the
realtors and buyer/seller. Instead of the buyer & seller each hiring
a realtor to represent them (well, at least this is the way it works
when my parents bought their homes), the seller kinda sortof announces
that they are selling/leasing to one or more realtors. Then the
realtor who can bring them the best price gets the deal. So at the
same time, the buyer also deals with multiple realtors, although they
may not all show you the same place, but sometimes the place they
wanted to show you will turn out to have been sold the day before by
someone else. This also creates a slight conflict of interest on the
part of the middle-man, since their comission is obviously higher if
they can agree to a higher price for the seller, and their goal is to
convince the buyer to agree to the highest price possible.
Third, also very unlike the US, there isn't a grand table listing all
recent sales in the region, so you're not exactly sure what price you
should be getting. I mean, all the places in a region ask very
similar prices, and there is great variance based on the different
levels of upgrades within the family. Still ...
There are also a great difference in the real estate market in
general. For the last couple of years, the price increase of housing
in Shanghai has skyrocketed, despite a great expansion in apartment
complexes. It got to a point where, we heard, one person bought a
house, sold it in three months, and made 300,000 RMB off of the deal.
That's a tidy $37,500 off a three month investment. Not bad, I
suppose. It's so not bad it's crazy.
On the other hand, there are a great number of owners now who are
really screwed. You see, these are people who own up to a dozen homes
or so, all based of loans. The banks weren't as strictly regulated,
so they gave out all sorts of loans, knowing that they will make
returns quickly. Well, can we say "investment bubble?"
So in order to prevent that, the central government has passed all
sorts of decrees, the most recent one is that, after June 1st, ALL
owners selling a home before owning it for more than two years must
pay an extra tax. Now all these people who have tons of short-term
loans want to sell as quickly as possible before the June 1st
deadline, since they can't afford to sell later. Then there are the
people who have long term loans and can afford until the situation
stabilizes. Then there are the people who have only a few places, and
thus can totally wait it out.
Oh, the real estate situation is amusing/screwed up!
Anyway, I learned a lesson in adventuresome rides: (in order of
increasing scariness, for me:)
A) Riding with an Asian female driver (I live with one, I have
friends who are, so I can survive).
B) Riding with an Asian female driver who is on her cell phone (hey,
some people can make short calls and drive).
C) Riding with an Asian female driver who is on her cell phone and
didn't fasten her seatbelt (well, maybe if she didn't fasten her
seatbelt she'll be more cautious).
D) Riding with an Asian female driver who is on her cell phone,
didn't fasten her seatbelt, and driving a stick-shift (WTF, are
you crazy?).
E) Riding with an Asian female driver who is on her cell phone,
didn't fasten her seatbelt, driving a stick-shift in China (let me
out, let me out!)
Anyway, it wasn't that adventurous, really, since she was a pretty
cautious driver, relatively speaking. She did live for ten years in
Japan, so she has some idea of what good driving is.
Oh, and I went shopping for AA batteries today. The wall was fairly
interesting. From top to bottom, the prices for 4 AA batteries:
Duracell : 24.90 RMB == ~$3
Energizer : 9 RMB == ~$1.12
Store brand : 10 RMB == ~$1.25
Nan Fu : 7.70 RMB == ~$1 (note, pack of 5)
Everready : 3.60 RMB == ~$.45
I thought it was an interesting span of possible costs.