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Exactly right. But given the demand in those cities from non-Chinese buyers I expect it would take a while to see it actually reflected in prices. In the Bay Area at least there is also a lot of Russian money in the real estate market so it might mitigate some of the effect as well.

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Real estate prices are extremely responsive to very small changes in demand. Chinese buyers compose the majority of international buyers in most investment markets. I see the ownership makeup of several 200+ unit HOAs where we are allowed to get insight into LLC ownership. If Chinese buyers quit buying my estimate is that San Francisco prices would fall by 10%. There are just not many domestic buyers at current prices. If the most recent wave of Chinese investors liquidated properties acquired since 2011, the market falls another 10%; although that's unlikely because they tend to have a buy and hold forever mentality. What surprises me the most about the current market is the fact that rents have been able to rise so much without hitting a harder affordability ceiling.

From what I've heard (realtor friend), the Russians prefer LA to SF. Sure, there's a "little Russia" in the Richmond district, but there aren't too many Russians interested in the Bay Area (unless they're working for Tech in the area, of course).

Interesting cultural insight about Chinese money preferring SF while Russian money prefers LA.

Is it really true that Chinese money prefers SF? Chinese money definitely loves LA, perhaps its impact is just more pronounced on a smaller city like SF? My knowledge on this is purely anecdotal, I'd love to see some data.

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