Inundated with cash, Chinese homebuyers are overwhelming the U.S. housing market. “The Chinese came out really huge in the past year,” said Jonathan Miller of Miller Samuel, a New York-based appraisal company.
Based on data published by the National Association of Realtors (NAR), the Chinese buyers group accounted for 18% of the $68.2 billion that foreigners spent on US real estate during the 12 months ended March 31. Furthermore, data shows that the median price of the houses that Chinese purchase is much higher than a typical foreign buyer (namely $425,000 for a Chinese buyer vs $276,000 for a typical foreign buyer). Lastly, data indicates that nearly 70% of those Chinese purchases were made in all cash.
The demand of Chinese homebuyers is mostly felt in California; more than 50% of all homes sold to foreigners is sold to Chinese buyers.
Sally Forster Jones, a real estate agent with Coldwell Banker International in Los Angeles, said that Chinese nationals are buying up luxury properties on the city’s Westside. She estimates that she assisted approximately 10 Chinese citizens with the purchase of a multi-million dollar home over the last year. “The uptick in sales to Chinese buyers started several years ago but it has increased dramatically lately,” she said. She says that most of her Chinese clients are industrialists or real estate tycoons. She also says that some of those families have children who go to school in Los Angeles and they are buying the property for that purpose.
Rick Turley, who manages several real estate offices for Coldwell Banker says that “the current hot spots are Palo Alto, Menlo Park and Cupertino, near Apple headquarters.” For example, last year, a family from Shanghai bought a condo for their daughter who was attending Stanford University. This daughter now works at Google.
Source: WQAD, July 2013