Chinese Investors Flock to California and Probably Elsewhere

MND has published a number ofrnstories from the California Association of Realtors® and DataQuick about thernstaggering home increases that have hit Northern California residential realrnestate.  Mark Berniker and Josh Lipton,rnwriting for the CNBC website, now provide what could be a partialrnexplanation:  computers.</p

Not just computers but cell phones,rnnotebooks, the Internet, and all of the other technology that surrounds themrnand what has become shorthand for the lot, the Silicon Valley.  This nickname originally was coined in thern1970s for the Santa Clara Valley but has expanded to include much of the SanrnFrancisco Bay area.  The median price forrna home in the Santa Clara Valley in September was $778,000, an increase of 19.7rnpercent since September 2012, and in San Francisco the median was $858,300, uprn26.6 percent.  </p

In good times the Silicon Valleyrnattracts engineers, coders, and support staff from all over the country, makingrnthe area boom and driving up home prices. rnTimes are very good for hi tech today. rn</p

But Lipton and Berniker point tornsomething else that is going on, “With tech stocks surging and IPOs sproutingrnup left and right, the area is in the midst of a real estate bonanza that’srnattracting a wave of buyers from China.” rn </p

Real estate agent Ken DeLeon toldrnCNBC that he had sold more than 20 luxury homes in the area to buyers fromrnmainland China, Taiwan, and Hong King, mostly in the $2 million range andrnhigher and recently bought a Mercedes bus to shuttle his Chinese customers tornhome viewings.  </p

Chinese investors are not confiningrntheir interests to the Silicon Valley, however. rnSRE Real Estate Investments reports that international real estaterninvestors and developers primarily Chinese, are snapping up propertiesrnthroughout the Los Angeles area.  Thernfirm cities several specific factors pulling the Asia money into U.S. realrnestate.  These include the improvedrneconomy, stability of return on investment and liquidity in the market.  </p

Jay Belson, CEO of SRE said thernChinese development firms are investing in a range of different property typesrnbut their interest in residential properties seems to be growing in particularrnthose close to military bases and hospitals as well as near universities andrnother education centers.  </p

The National Association ofrnRealtors® said in June that international sales had accounted for 6 percent ofrnall home sales over the previous year, about $68.2 billion in dollar value.  The most active borrowers were Canadians atrn23 percent followed by the Chinese at 12 percent and the two were the fastestrngrowing foreign investor groups.  Chinesernbuyers tended to purchase more expensive properties – a median price of $425,000rnand typically in California. </p

The Wall Street Journal however saidrnthat, while Chinese institutional investors are still drawn to their favoriternlocations in California and New York, “many are now also headed to cities suchrnas Houston, Boston and Seattle as they seek geographic diversity as well asrnbigger lot sizes.’

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