The real estate market in the United States is still being significantly boosted by large numbers of overseas buyers, and many are Chinese. According to figures from the National Association of Realtors, Chinese buyers accounted for one out of every four dollars spent by foreigners on US real estate, and the amount they spent increased by 70% to $22 billion.
This is a big increase on the previous year, when Chinese buyers spent around $12.8 billion on property, while the total value of sales to foreigners was $68.2 billion. All in all, home purchases by foreigners increased by 35% in 2013, amounting to a total of $92.2 billion. If you look at the number of homes bought, then Canadians actually top the list, but the houses purchased by the Chinese are much more expensive in comparison. The average home bought by a Chinese buyers costs $591,000, and they tend to purchase homes in more expensive parts of the country.
The majority of Chinese also buy for cash, with three quarters of all sales being all-cash.
The majority of sales to Chinese buyers are in California, accounting for one third of total purchases. This is not particularly surprising given the number of well-established Chinese communities in California, particularly in Irvine and San Gabriel Valley in the Los Angeles area. However property in Washington State is proving increasingly popular, accounting for 9% of purchases, closely followed by New York, Pennsylvania and Texas.
The reasons for purchasing a home vary considerably, but just 39% intend to use their US property as their main home. Some are buying apartments for children attending college over here. They are hoping their purchase will not only save them dorm fees, but will also have appreciated in value once their child graduates college. Others are buying property to rent out, particularly cheaper property in distressed areas such as Detroit. Some are buying a home for their own use during vacations, and are renting it out the rest of the year.
According to the article in Forbes, the US real estate market is viewed as being a relatively safe place in which to invest. Chinese home purchases accounted for 16% of all sales, a 4% increase on last year, and while Canadians topped the list at 19%, the fastest growing source of clients is from China. Purchasers from Mexico accounted for 9% of the rest of sales, while UK buyers accounted for 5% of foreign property buyers.