With the real estate boom in China drawing to a close, Chinese nationals with cash to invest are turning to foreign properties. In the U.S., they account for nearly $7.5 billion in sales, with a 24% increase in the year ending March 2012.
As the second largest foreign buying group in the—Canadians are first—some Chinese investors want portfolio diversity, while others look to educate their children in the U.S. Cities meeting criteria for both, such as San Diego, California, expect to see a mini housing boom similar to the one experienced in Vancouver, British Columbia recently.
One result of foreign cash investment is an increase in property values for that market. An overall positive for the real estate business, such a boost may also result in local buyers priced out of the market.
Culturally, there is prestige in owning property in the U.S. Locations like San Diego attract Chinese buyers with a beautiful climate, excellent school systems and culturally diversity. Particularly appealing are the established seaside communities of La Jolla and Del Mar, but newer developments in San Diego County are generating attention as well.
Realtors in other hot areas, such as the Pasadena-San Marino neighborhoods in Los Angeles County or the Vista Del Verde developments in Orange County’s Yorba Linda, for example, say sales to Chinese investors in the $1 million to $3 million market account for up to one-third of the transactions.
Some realtors are taking advantage of this trend by advertising specifically to Chinese investors, including ads in the Chinese edition of the Wall Street Journal. Agents describe potential Chinese buyers as “very motivated.” San Diego area realtors reports “quite a surge” in Chinese investors among sales. Some realtors in Beijing and Hong Kong now specialize in pairing Chinese buyers with properties in the U.S.
Across the nation, Chinese investments include hotels and commercial properties in Manhattan and San Francisco, and foreclosed homes in places as diverse as Nevada, Arizona and Florida. Most states have relatively easy requirements for sales to non-citizens and some lawmakers have proposed legislation that may make it even simpler—hoping to boost the real estate economy through foreign investment—by offering resident visas for home purchases above a certain amount.
For more information on San Diego or Rancho Santa Fe Luxury Homes, contact Lucy Kelts for a no-pressure real estate consultation.