Despite the economic slowdown in China, Chinese investors are still having a major influence in the Greater Seattle Real Estate Market. For the 12 month-period ending March 2015 buyers from China purchased $28.6 billion in real estate in the United States. That’s up from $22 billion a year ago, according to NAR’s 2015 Profile of Home Buying Activity of International Clients. Chinese buyers now account for 28% of all international sales in the US by dollar volume, surpassing Canada for the first time. About half of those purchasers were US resident buyers. And about 86% of the purchases were in central cities or nearby suburban areas. The vast majority of these purchases were of single family homes (approx. 62%).
The Greater Seattle Area has benefited tremendously from this influx of Chinese investment. 8% of all Chinese real estate purchases in the US were in Washington State (2nd highest in the country behind California). And this is expected to rise in the near future.
Chinese buyers spend an average of $831,800 dollars on a home, far above the US average, and top among other international buyers. And approximately 69 percent of those purchases are all cash, making their offers very attractive to sellers who are sometimes wary of financing conditions.
Chinese buyers of high-net wealth are motivated to move their money into sound investments. Ownership of real property in China is still a bit of an unknown. Currently Individuals in China can only have transferrable land-use rights for 70 years. They can privately own residential houses and apartments on the land, but not the land. This situation, coupled with the stability of our political system and the relatively low real estate prices, makes the US a very attractive location to invest in real estate. Many Chinese also feel a sense of urgency because they anticipate their currency will be devalued sometime in the near future.
According to the Hurun Report released Nov 27, 2015, Los Angeles and San Francisco are the number one and two preferred destinations for overseas real estate investments for Chinese of high-net wealth. And New York and Seattle have now displaced Vancouver for third and fourth place, followed by Boston, Sydney, Toronto, Melbourne and Singapore.
This is going to continue to have a major influence in the Seattle real estate market for the foreseeable future.