“Oh, hey! How ya’ doin’?” Raleigh Ornelas hollers, leaning out the window of his spotless white pickup truck. He’s recognized the man across the street, a developer standing in front of a Tuscan-style mansion under construction. “Where have you been hiding at? I call you, you don’t call me.”
Ornelas is an informal broker in Arcadia, Calif., a Los Angeles suburb at the foot of the San Gabriel mountains. He’s been keeping an eye out for the builder, an Asian man with a slight comb-over who goes by Mark. Ornelas has found two older homeowners who’ve finally agreed to sell their properties, and he knows that Mark, like all developers here, needs land on which to build mansions for an influx of rich clients from mainland China.
Ornelas rattles off addresses on a nearby street. “Three-eleven, that guy, he’s wack,” he says, shaking his head. “He wants 2.8.” He means million dollars. “And then 354, they want $2 million.”
The lot is 17,000 square feet. “Seventeen for 2 mil?” Mark asks, incredulous.
“I know,” Ornelas says. “They’re going crazy.”
A year ago the property would have gone for $1.3 million, but Arcadia is booming. Residents have become used to postcards offering immediate, all-cash deals for their property and watching as 8,000-square-foot homes go up next door to their modest split levels. For buyers from mainland China, Arcadia offers excellent schools, large lots with lenient building codes, and a place to park their money beyond the reach of the Chinese government.
The city, population 57,600, projects that about 150 older homes—53 percent more than normal—will be torn down this year and replaced with mansions. The deals happen fast and are rarely listed publicly. Often, the first indication that a megahouse is coming next door is when the lawn turns brown. That means the neighbor has stopped watering and green construction netting is about to go up.
This flood of money, arriving from China despite strict currency controls, has helped the city build a $20 million high school performing arts center and the local Mercedes dealership expand. “Thank God for them coming over here,” says Peggy Fong Chen, a broker in Arcadia for many years. “They saved our recession.” The new residents are from China’s rising millionaire class—entrepreneurs who’ve made fortunes building railroads in Tibet, converting bioenergy in Beijing, and developing real estate in Chongqing. One co-owner of a $6.5 million house is a 19-year-old college student, the daughter of the chief executive of a company the state controls.
Arcadia is a concentrated version of what’s happening across the U.S. The Hurun Report, a magazine in Shanghai about China’s wealthy elite, estimates that almost two-thirds of the country’s millionaires have already emigrated or plan to do so. They’re scooping up homes from Seattle to New York, buying luxury goods on Fifth Avenue, and paying full freight to send their kids to U.S. colleges. Chinese nationals hold roughly $660 billion in personal wealth offshore, according to Boston Consulting Group, and the National Association of Realtors says $22 billion of that was spent in the past year acquiring U.S. homes.
Arcadia has become a hotbed of the buying binge in the past several years, and long-standing residents are torn—giddy at the rising property values but worried about how they’re transforming their town. And they’re increasingly nervous about what would happen to the local economy if the deluge of Chinese cash were to end.
(Mod: You can read the rest of this article by clicking here.)
Is there another way to make money in Sierra Madre besides real estate?
(Mod: There is. And anyone can get in on the action. As they say, you can't win it if you're not in it. This from CBS Los Angeles.com - link.)
Winning $5 Million Scratcher Sold In Sierra Madre - Officials with the California Lottery say a lucky player just scratched his way to a $5 million prize. Steve Armogida won one of the top prizes in the Million $$ Match Game.
Armogida bought the winning $5 million ticket at Happy’s Liquor on Sierra Madre Boulevard in Sierra Madre. The store also wins a bonus of $25,000 for selling one of the top winners.
Million $$ Match Scratchers is a $20 game. The lottery says there is more than $340 million in total available prizes in this game alone.
Non-winning tickets also have a chance for smaller prizes in the Lottery’s 2nd Chance Draw.
According to CALottery.com, there are two more $5 million tickets available, as well as three $2 million tickets and five $1 million tickets.
(Mod: They are even happier at Happy's then they were before. And they have always been pretty chipper. Except for the guy in the afternoon. In the spirit of full disclosure, I myself have purchased a few lottery tickets at Happy's. But only because I wanted to make a small donation to public education.)