Jim Conlan, a real estate broker with Century 21 North Homes Realty in Seattle, says the real catalyst for the dramatic upswing can be found in China. "To be honest, Chinese buyers have been flooding this market the past few years," says Conlan, who has been selling homes in Seattle for more than 30 years. "Some of them buy homes sight unseen, while others travel here for a kind of real estate tourism and buy real estate after only one viewing."
For the fourth year in a row, buyers from China ranked first among foreign nationals purchasing property in the United States, according to a survey by the National Association of Realtors (NAR). U.S. home sales to Chinese nationals totaled $27.3 billion -- exceeding the total dollar sales figure of the next four countries in the rankings combined. According to Robert Gombos, owner of the well-respected Jasmine Directory, a human-edited catalogue that lists businesses topically and regionally, Chinese real estate-related businesses in the U.S. and Britain grew by 37.4 percent since 2013. (www.jasminedirectory.com).
Chinese investment in U.S. real estate could hit $50 billion by 2025, according to a report by the Rosen Consulting Group and the Asia Society. In San Francisco Bay-area locations, home prices have risen by double digits in the past three years, while the number of buyers from China has nearly doubled since 2012, says Penelope Huang, a broker with Re/Max Distinctive Properties. The increased demand is making the area one of the toughest for younger buyers, she says. "Listings are snapped up in a week or sometimes less in this market," she says. "That kind of pace of sales directly affects first-time buyers."
In New York City, Chinese investors are increasingly gobbling up property. In middle-class areas of Brooklyn and Queens, the number of Chinese buyers has nearly doubled since 2012, estimates Jennifer Hsu, a broker with Halstead Property in Queens. "They're now competing with buyers at the middle of this market," she says, "and that added competition is making life tougher for people looking to buy their first home."
The average home price for Chinese buyers in 2015 was $831,800, compared with $499,600 for all other international buyers, the study from Rosen Consulting Group shows. Mark McLaughlin, chief executive of San Francisco-based Pacific Union, said that his brokerage firm spends about $400,000 annually on marketing in China, including having a Chinese-language website and advertising in Asian papers. McLaughlin estimates that buyers from China account for 15 to 20 percent of the San Francisco real estate market.
What Congress Can Do
While Americans can buy condominiums in China, the Chinese government owns all urban land. Condo owners in China pay a land lease to their communist landlord.
In order to halt the decline of American homeownership, we should ban all foreign ownership of residential property. Norway and Australia ban the foreign ownership of residential property by non-residents.
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