Chinese eyeing U.S. real estate market
Telling you the world is flat and that we’re living in a global market won’t surprise you but what might surprise you is who your new neighbors may be and how fast they’re moving.
Unless you’ve been living under a rock you know full well that China holds a lot of our billion dollars of debt, however, now it appears they also want to take hold of our real estate. Wealthy Chinese are snapping up luxury properties in the United States. For the moment Los Angeles, New York City and Miami appear to be in their crosshairs but hold on to the keys to your condo; they may be coming for you, too.
Since our housing crisis, foreign investors have been interested in the United States’ real estate market. With prices going down our real estate became an attractive option for investors in countries whose currency were stronger against the U.S. dollar. In particular the Chinese Yuan has risen more than 7 percent against the dollar since June of 2010. This combined with China’s growing number of extremely wealthy individuals has made our depressed housing market look very attractive.
Chinese buyers are gobbling up multiple apartment condos in Miami as well as homes in golfing communities in Fort Myers where according to the Wall Street Journal, a comparable $250,000 home would cost over $2 million in China. Florida is considered a good choice for investment property partly because of the weather but also because of good air and food quality both of which can be a challenge in China.
High-end new home developers on both the east and west coast are looking at installing wok kitchens, applying feng shui principals and even using lucky numbers to entice buyers. New York City brokers and builders are seeing an enormous influx of Chinese buyers infiltrating their luxury market spending millions on apartments.
A Wall Street Journal report estimated that China accounted for $9 billion of U.S. home sales in the 12-month period ending in March. This was up by 89 percent from 2010 making them the second largest group of foreign buyers of homes in the United States behind Canadians. This number may actually be understated since the sales figures don’t reflect private sales.
If you’re alarmed by Chinese investors and private individuals buying our real estate, think about this. A Chinese bank called China Development Bank is negotiating with Lennar Corporation to finance large commercial and residential projects. Lennar is the third largest home builder in the United States and they are currently working with China Development Bank to put together large scale housing projects in California where part of the funding is coming from the state and now apparently part from China. This has been a pattern with the Chinese bank in developing countries around the world helping them to build infrastructure in Africa, South America and Asia.
Maybe Anna Maria homeowners should get ahead of the curve and start studying the principals of feng shui. Red lacquered front doors invite prosperity and if you’re lucky to have the number 8 in your address a Chinese buyer will consider that a very good home.
This influx of foreign money into our country sounds a little like the 1980s real estate market that was flooded with Japanese buyers lasting until their economy went south. Nevertheless, having any buyers for our properties is a good thing even if this may be the price we pay for a weak economy trying to survive world globalization.