How Chinese Homebuyers Are Growing Communities in the U.S. From across the Globe

While many U.S. citizens are still struggling to buy a home in this post-recession, Chinese investors have taken full advantage of our economic turnaround. In fact, according to the National Association of Realtors, Chinese buying was up more than 70% in the 12 months ended March 31, 2014. That figure represents a total of $22 billion and approximately one-fourth of all moneys spent on foreign purchases.

Extraordinary Buying Habits

Chinese homebuyers are very attractive to American real estate brokers for a wide variety of reasons. For starters, 75% of their purchases were made in cash. Not to mention, they’re spending habits chime in at an average of $591,000 per house. Perhaps the most interesting concept of how Chinese buyers are purchasing homes in America is the fact that many of these investors will bid on, and spend hundreds of thousands of dollars, for properties located half way around the world, without ever seeing the house in person, or even physically stepping foot on U.S. soil!

Where Are They Buying?

These all cash buys for Chinese foreigners are commonly on the west coast, particularly in California where 33% of their purchases were made, followed by Washington State which is rising at 9%. This is for obvious geographic reasons, seeing as the west coast is the first point of contact to the American mainland. However, New York, Pennsylvania, and Texas have also become locations of interest recently, albeit to a much smaller degree.

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Why America?

So why have the Chinese chosen to live out the American Dream? Ironically, only 39% said they plan on using their new homes as their main place of residence. The truth is many Chinese families are making their purchases based on other factors. Some are simply looking for a vacation property in which they can stay while visiting America. These kinds of buyers are often investors who will also rent out the property during the months they are not around. Others may decide to split the landlord responsibilities with family members and look for distressed properties they’re able to rent out and make a profit from year round. Some decide to make purchases for their kids who are going away to school in the U.S. This not only gives their children a place to live, but also affords them a piece of mind to know that their children are safe. In the end, this can still turn out to be a lucrative investment if the family is able to sell the house at an appreciated value after their child has graduated from college.

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Next to Follow Suit

When evaluating which foreign countries are purchasing the most pieces of property in the United States, the top 5 look like this: Canada, China, Mexico, India, and the United Kingdom. Besides our neighbors to the North and South, it would appear India is also looking to pursue the American Dream for their own intents and purposes. As our communities continue to grow, it will be interesting to see how our own citizens are able to remain a major part of the economic turnaround.

What do you think of outside countries purchasing land in America? Would you do the same if you had the opportunity to do so? Leave a comment and let us know what you believe the positive and/or negative effects of this trend might be.