As the U.S. housing market slowly starts to recover, foreign investment is helping it along.
According to the National Association of Realtors, non-American buyers accounted for $82 billion in home sales last year. More than $7 billion of that is by the Chinese, who are now the second largest foreign home purchasers after Canadians. They’re buying high-end, multimillion-dollar homes from California to New York and paying cash.
“They’re probably the top 1 percent of the Mandarin speakers that are coming from China,” said Brent Chang, a Coldwell Banker realtor in Southern California. “They’re really the people who have their own businesses or maybe were part of the government.”
Some of these homes are specifically catered to Chinese buyers. Fox News visited a home listed at $8 million in Pasadena, Calif., that had two kitchens, the smaller one had ventilation for the cooking for aromatic or “stinky” foods like fish. It also has a lower level in-law suite and even a koi pond.
“People from China do a lot more business in their homes so they want their homes to really scream that they’ve made it and they’re successful, ” said Chang.
The Chinese like the U.S. because their money goes further. In Shanghai, $2 million might only get you a two-bedroom condo.
“You get a huge bang for your buck, you get land, you get good schools, you get a safe environment, nice community life, ” said Linda Chang, a realtor who works with her son, Brent, in the San Marino and Pasadena areas of California.
Chang says while many other real estate markets have suffered, her area has flourished thanks to Chinese and other foreign buyers.
“It’s been fantastic for the U.S. housing market because we have not suffered as other communities have,” said the elder Chang. “In fact, our property values have increased.”
While some of the Chinese buyers live in the U.S. full or part-time, realtors estimate about 40 percent of the homes are for investments. They’re snapping up houses in states hit hard by foreclosures such as Nevada and Florida. Some are buying two or three homes at a time.
According to Shanghai magazine Hurun Report, mainland China has almost 1 million millionaires and nearly half of them say they want to invest in the United States.
“It’s a sign of their status,” said Betty Chan, who deals with Chinese buyers in Las Vegas. “You can show off to your friends and family that I can buy something overseas, not everybody can do it.”
Chan continued: “Most Chinese like to own a Mercedes … it doesn’t matter whether a Mercedes is a good car or not. It’s just showing their status in the community, so owning a foreign house is pretty much a prestigious status in China, so they’re proud to tell their friends: ‘Hey, I own a house overseas.'”
Buyers from China also invested almost $2 billion in commercial property in 2011, or quadruple what they spent several years ago.
Hat tip to daytrip for sending this in: http://www.foxnews.com/us/2012/11/27/chinese-buyers-lead-foreign-investment-in-us-housing-market/#ixzz2EfCsmkuK