Wednesday, October 19, 2016 / by Karen McGail
The influx of money coming in from China to U.S. real estate is reshaping some markets and serving as a major catalyst behind price upswings in some locales, The Washington Post reports. It’s not just luxury properties that Chinese buyers are targeting either.
Buyers from China rank first among foreign nationals purchasing property in the U.S., according to the National Association of REALTORS®. Home sales in the U.S. to the Chinese-born totaled $27.3 billion, but could reach $50 billion by 2025, according to a report by the Rosen Consulting Group and the Asia Society.
“Chinese buyers have been flooding this market the past few years,” says Conlan. “Some of them buy homes sight unseen, while others travel here for a kind of real estate tourism and buy real estate after only one viewing.”
In the San Francisco Bay-area, particularly Palo Alto and Woodside, home prices have doubled in the past three years while the number of buyers from China has nearly doubled since 2012, says Penelope Huang, a broker with Re/Max Distinctive Properties.
“Listings are snapped up in a week or sometimes less in this market,” she says. “That kind of pace of sales directly affects first-time buyers.”
Indeed, real estate professionals report a similar impact in Brooklyn and Queens, N.Y., where the number of Chinese buyers has also nearly doubled since 2012.
“They’re now competing with buyers at the middle of this market, and that added competition is making life tougher for people looking to buy their first home,” says Jennifer Hsu, a broker with Halstead Property in Queens.
Danielle Hale, NAR’s managing director of housing research, told The Washington Post that Chinese buyers are often bidding up prices in markets where demand is already high.
“That can cause prices to rise sharply and make it that much more difficult for locals to find a home to buy,” Hale says. “That’s particularly the case for many first-time home buyers looking for moderately priced homes.”
Broker Elizabeth Schwartz of Compass in New York says she’s worked with many buyers from China. Most are not just looking to buy a trophy property but are looking for more moderately priced homes that offer a good return at resale, Schwartz says.
“There’s a huge population of hardworking, educated Chinese who look to the U.S. for real estate investment,” Schwartz says. “But they come to this market not with money to just throw around, but rather to make informed, well-reasoned investment choices.”
Source: “Wealthy Chinese Buyers Are a Growing Force in U.S. Real Estate Markets,” The Washington Post (Oct. 14, 2016)