Chinese purchasing US homes with cash

Based on statistics published by the National Association of Realtors (NAR), Chinese buyers spent $12.3 billion on US real estate over the 12 months ending March 31 2013. This is 18% of all the money foreigners spent in real estate purchases in the USA.

When Alice Zhang of California noticed that a house in her neighborhood was put on the market for $1.23 million, she believed that it was too high and that no one would buy it.  Only one week later, she was surprised to hear that this house had been sold and their new neighbor was from China. "Our new neighbor paid cash, and that's why the owner made the decision to sell so quickly," she said.

Based on NAR, the median price of homes purchased by Chinese was $425,000, which is higher than the overall foreign buyers' median of $276,000.

Some 70 percent of the Chinese buyers used cash to pay for their homes in the US, according to a report on CNN.  Based on the Asian Real Estate Association of America (AREAA), there is no increase in the number of Chinese buyers who use mortgages, due to the strict underwriting process at US banks.

Stories around Chinese buyers purchasing expensive estate in California continue to circulate.  For example, last summer a Chinese couple spent $34.5 million on a Versailles-style mansion in Beverly Hills, Los Angeles. Another story is around a Chinese businessman who paid around $28 million for an estate.

Source: China Daily USA July 11 2013