Looking south from Central Park at the Manhattan skyline. The
tall building at center is the under-construction, 90-story,
residential condominium One57. Oliver Morris / Getty Images
The Chinese shopping spree of American real estate is ramping up, with buyers focused on more expensive homes in dense urban areas in California, New York and Washington state, according to a survey of realtors released this week. That survey confirms the general understanding that Chinese money is flowing into the U.S., driven by a favorable exchange rate, increased access to credit and desire for secure investments.
According to the National Realtors Association (NAR) survey, the Chinese spent $22 billion on U.S. housing in the 12 months through March — 72 percent more than they spent the year before. Among foreign buyers, Canadians ranked highest in the share of transactions, at 19 percent, but the Chinese bought by far the most expensive homes, with a median price of over half a million dollars. That’s compared to the $213,000 spent by the average Canadian buyer of U.S. real estate, $141,000 spent by the average Mexican, and about $200,000 spent by the average American.
More than any other foreign buyers of U.S. real estate, the Chinese appear to have a predilection for cities. One of those cities is New York. Jonathan Miller of Miller Samuel Inc., a real estate appraisal firm based in the city, said 20 years ago it was the Japanese snapping up properties. More recently it was Russian oligarchs or Saudis. Now it’s the Chinese.
Foreign buyers usually make up 15 percent of Manhattan’s condo and townhouse market, Miller said. Today, he puts that number closer to 30 to 40 percent. (Nationwide, foreign buyers make up about 7 percent of transactions, though that share is rising.) And while Canadians and Europeans remain prominent buyers, the Chinese share of purchases is growing rapidly.
Other foreign buyers prefer vacation homes in less urban areas. Of the five countries whose citizens are the prime buyers of U.S. real estate — Canada, Mexico, China, India and the United Kingdom — China ranked at the top in the percentage of clients who preferred “central city/urban” real estate areas to “suburban,” “small town/rural” or “resort” areas, according to the NAR survey.
Jed Kolko, the chief economist for the real estate website Trulia, noted last month that the Chinese searched for real estate in dense urban areas nearly nine times more frequently than they did for real estate in vacation areas — the highest ratio of the 10 countries Trulia tracks. And when the Chinese searched on Trulia, they focused largely on the West Coast, including Los Angeles, Orange County, Palo Alto and San Jose in California, and around the Seattle area....MORE
