Ken DeLeon & Michael Repka travel to India to research tips for Silicon Valley home sellers and experience the Indian real estate market
Since the high-tech boom in Silicon Valley, an ethnic mélange of skilled and educated workers from India have migrated to Silicon Valley. The California Public Policy Institute conducted a study in 1999 and found that by 1998, Chinese and Indian engineers were running one-quarter of Silicon Valley’s technology businesses. According to the 2010 Census, the Indian population in the Bay Area has grown dramatically over the past decade, from about 66,700 in 2000 to about 118,000 in 2010, in Santa Clara County alone.
As a result of this Indian influx, we see Indian life taking root in Silicon Valley’s land of software techies and high priced tract homes. Scattered throughout the Bay Area are Indian restaurants, video stores, groceries, sari shops, festivals, and parades. The Sikh temple, sitting on 42 acres in San Jose, even generates hefty amounts of revenue for new facilities and remodeling. In addition, Naz 8 Cinemas near Silicon Valley is a theatre showing only films from South Asia.
Ken and I recently returned from a two and a half week trip to India, including visits in Bangalore, Chennai, Hyderabad, Mumbai, and Delhi. During this trip we met with some top Indian real estate agents, investors, and real estate developers. Our experience was both educational and enlightening. We learned about the Indian real estate consumer mentality, which shed light on the types of properties and transactions that appeal to Indian buyers in Silicon Valley.
Real Estate in India
We found several interesting characteristics of the real estate market in each of the cities we visited in India. First, the Indian property market is booming along with its economy. Prices of residential properties in major cities, particularly in areas such as Delhi, Mumbai and Bangalore, have dramatically increased. The most affluent and desired parts of the cities tend to be up in the hills. Further, even the most affluent areas experience significant amounts of road noise due to the volume of traffic and the tendency of cautionary use of car horns. Second, the mortgage rates in India are quite high, around 10.5%, almost triple of what they are in the United States. Third, the Indian real estate market is still highly unregulated. Property deals in India sometimes employ tax avoidance techniques known as white and black money. White money is paid by check and is recorded as the sale price. Black money is paid in cash and not declared to tax authorities so as to lower tax or capital gains liability for the seller.
Finally, Vastu Shastra plays a big part. During our trip to India, we discovered that Vastu Shastra is an ancient India doctrine focusing on how the laws of nature affect homes. Originally, it applied to Hindu temples but has now evolved for homes and dwellings. Vastu Shastra relies on five basic elements: earth (bhumi), water (jal), air (vayu), fire (agni), and space (akasha). Because the world comprises of these five basic elements, a home is best designed when these elements are perfectly balanced.
When we visited some of the homes in India, we noticed that the fireplace, kitchen, and lantern were often placed in the south-east corner of these homes, as this location is associated with agni, the element of fire. In addition, this south-east corner is believed to bring good health, strong finances, and familial happiness.
Furthermore, some of the homes had open courtyards in the center of the house because this area is ruled by akasha, the element of space, and is considered the most powerful zone of the home. As such, all directions should point to the home’s center and should be open and uncluttered. Lastly, many of the doors, windows, ventilators, balconies, trees, and plants sat in the north-east parts of the homes in order to perfectly balance with vayu, the element of air.
Indian Buyers in Silicon Valley
Our trip to India showed us some cultural influences that may be at play with Indian buyers in the Silicon Valley. For example, when we analyzed our sales over the last couple of years, a significant number of properties located in Silicon Valley hills were sold to Indian families. We also noticed that a number of the homes purchased by Indian families experienced more ambient noise than other homes. In comparison to the traffic noise in India, the freeway or expressway noise in Silicon Valley is relatively minimal.
Additionally, Vastu Shastra played a big part for Indian buyers in Silicon Valley. The selection of the site/land, the alignment of the house in accordance with the magnetic lines of the earth, and the amount of light and wind that the house receives are all relevant to Indian buyers.
As always, cultural awareness can help in the marketing of various properties, but it certainly would be foolhardy for someone to think that any ethnic group is going to act in unison.
It is extremely helpful to understand what potential buyers experience to best prepare and market a property effectively and successfully in Silicon Valley.