From our friend Karen at BloombergBusinessweek:
“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.
Read full story here:
1 CNY = 0.163305 USD
What does the typical chinese worker earn?
Funny, didn’t someone here mention Arcadia a short while ago? 😉
avegjoe:
“1 CNY = 0.163305 USD
What does the typical chinese worker earn?”
Better question would be how many rich chinese are there looking to launder money.
Also, the Chinese who move here are attracted to Arcadia because it has it’s own school districts, which are generally outside the influence of LAUD. This allows them to essentially take over their local schools and call the shots in a way that would be impossible in the greater Los Angeles area. This attracts better teachers who would love teaching bright, motivated chinese kids who tend to score high grades no matter what method you use. The kids get “A’s”, the teachers look good, everyone is happy.
For rich Chinese, America has become the place for Chinese multimillionaires to go for an even more amazing life.
After traveling to Asia recently. There’s more people in Asia with $$$ than people in America think.
I was blown away by the difference between the haves and the have nots.