The overflow from China’s economic high tide is transforming the housing markets of suburban Los Angeles.
Affluent Chinese home buyers are driving prices past boom-era peaks, spawning a subset of property brokers and mortgage lenders that cater to their distinct needs — and even dictate design details in new subdivisions.
Chinese buyers bought 12% of all U.S. homes purchased by foreign citizens last year, up from 5% in 2007, according to the National Assn. of Realtors. More than half their home purchases were in California. And more than two-thirds of them paid cash, the trade group said.
The trend appears unlikely to unwind soon. More than 60% of China’s wealthy have left or plan to leave the country, at least part time, and their No. 1 destination is the United States, according to the Hurun Report, a Shanghai publishing firm focused on recently minted millionaires and billionaires.
Despite dizzying ups and downs in U.S. home prices, the market can seem more stable than in China, where fears of a property bubble have added to the economic and political worries of the burgeoning middle and upper classes.
Eva Chen and her husband travel between their homes in Shanghai and Arcadia, where they purchased a property near Santa Anita Park in October. They scooped up the second home as an escape from pollution and a shot at better schools for their two infants.
Compared with housing prices in China, the $1.27-million Arcadia property didn’t seem expensive.
“The Arcadia house is cheaper,” Chen said.
Others want the prestige of a San Marino or Pasadena mansion, even if paying for it means working in China and rarely visiting. One of Ng’s neighbors bought a Pasadena estate, then lived there for just two days out of the two years that followed.
“He was not renting it out,” Ng said. “People have so much money, they just say, ‘What the heck. It’s a nice neighborhood. I might as well just buy one.’”
It’s a story echoed by Patti Hahn of Arcadia, gesturing to the house next door, which sold for $2.45 million last year, up from $1.55 million in 2006, the last time it changed hands.
“No one lives there,” Hahn said.
In Las Vegas, which has a long-established community of ethnic Chinese residents, as well as the allure of gambling and inexpensive housing, Lennar went a step further when it developed a 40-acre housing tract, Lantern Gardens, on the outskirts of town.
In addition to applying feng shui design principles and interior apartments for relatives, Lennar designed a central park that is round instead of square and aligned most of the homes on a north-south axis, reflecting the preferences of many Chinese.
“The traffic coming through was principally Asian, and mostly Chinese,” said Jeremy Parness, the company’s division president for the area.
The company has even taken care to avoid putting the number four in any address, because it rhymes with the Chinese word for death, Parness said.
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