Southland homes draw foreign cash

A record amount of foreign money is flowing into the U.S. housing market. And the Southland is a prime destination.

Overseas buyers and new immigrants accounted for $92 billion worth of home purchases in the U.S. in the 12 months ended in March, according to a new study out Tuesday from the National Assn. of Realtors. That’s up 35% from the year before, and the most ever.

Nearly one-fourth of those purchases came from Chinese buyers. And the place they’re looking most is Southern California. Among U.S. cities, Los Angeles was the top destination for real estate searches from China on the website, according to the study; San Francisco was second; followed by Irvine.

The report highlights the growing effect of global capital on some local housing markets. The $92 billion amounts to 7% of all money spent on homes in the U.S. during those 12 months, and nearly half of it was concentrated in a handful of cities, including Los Angeles.

There are several reasons why so much global — and especially Chinese — cash is flowing into Southern California real estate, said Jed Smith, managing director for quantitative research at the Realtor group.

Some families are buying houses for their children attending California universities, or even high schools in some top districts. Others see the U.S. as a smarter investment than the overheated Chinese housing market. And in some cases, wealthy Chinese are parking money in a safer haven than is available at home.

“California’s a nice place to live, and by and large the U.S. is a good place to put your money,” Smith said.

That’s driving prices in parts of the region that have long been popular with Chinese buyers. Home values have returned to pre-recession levels in parts of the San Gabriel Valley, for instance. And in Irvine, home to a booming population of young Asian families, new residences are getting scooped up by Chinese buyers.

Many international buyers are drawn to parts of the region where teir fellow countrymen already live, said Sheril Liu, a real estate agent with ReMax Premier Realty in Irvine. Whether it’s family connections or simple familiarity with the names, new buyers tend to follow the old ones.

“These are famous cities they know,” said Liu, an immigrant from China who estimates that half her business now comes from Chinese buyers. “They know San Francisco. They know Los Angeles. They know Irvine.”

Good schools certainly help. Liu said many of her clients are families with children, planning to immigrate to the U.S. and looking for a top-ranked school district. And the high-cost Chinese housing market means that even neighborhoods in the U.S. where the median price is pushing $900,000 can look like a steal.

“The real estate market in China is crazy right now,” Liu said. “You can sell a little condo over there and easily afford a big single-family home here.”

As the Chinese-to-U.S. market grows, more agents are trying to find ways to tap it. MSM Luxury Estates in Beverly Hills, for instance, opened an office in Hangzhou last year to better reach new customers. So far, said Chief Executive Moe Abourched, it has done quite well.

“We’re seeing more of an influx all the time,” he said.

Abourched said his firm is working with a range of customers — including would-be immigrants who need a mortgage, wealthy younger Chinese who can pay millions in cash, and investment groups aiming to buy tracts of land to develop new subdivisions targeted specifically at Chinese buyers.

They wouldn’t be the first to build with the foreign market in mind. Some home builders in Irvine have started incorporating Chinese design principles into their houses. And Chinese state-owned Greenland USA is launching a $1-billion project in downtown Los Angeles, including a 38-story skyscraper with condos aimed at an “international clientele.”

Sales will start in September, and interest has been strong from foreign buyers, said Horacio LeDon, president of Douglas Elliman Development Marketing, which is handling sales for the project — though he notes it has been almost as strong from local buyers.

LeDon said he sees high-end buyers from all over the globe — the sort of people who typically stuck to New York or London or their own countries — taking a closer look at Los Angeles. And not just Asians. The weather of Southern California appeals to Europeans; the glamour to buyers from Russia; and the economic stability to Latin Americans looking for a haven.

“The world has really opened its eyes to California,” he said.

Still, he noted, these global elite are only active in a certain slice of the market. And while that may keep driving up prices at the high end, it probably won’t make much difference to the average first-time home-buyer in a middle-class neighborhood.

Smith agrees, noting that beyond a few pockets like the San Gabriel Valley or Irvine, the effect of foreign buyers, even in Southern California, is muted.

“I don’t think the foreign buyer is cutting very many people out,” he said. “There are plenty of other houses available.”



About Ady Simion (Realtor and Public Notary)

Ady Simion was named in the Top 1% of all agents for NRT LLC a subsidiary of Realogy that operates a variety of real estate offices under brands such as Coldwell Banker, Sotheby's International Realty, Century 21, The Corcoran Group, and the technology-based brokerages ZipRealty and Climb Real Estate. NRT has 787 offices and 47,000 sales associates. Selling and buying property can be very stressful but with the right agent it can be profitable and a fun experience. Ady is also a Notary Public and being a people person he wants to help negotiate for his clients making their transactions as smooth as possible. Ady’s goals are simple: He wants to be the best source of information on the Los Angeles area Real Estate market, as he assists clients through each transaction with care and professionalism. He is proud of his large referral base of clients who have placed their trust in him over the years. Why him, when there are so many good people out there?!?! • Sellers will have their property exposed to the largest team of sales professionals in the world by far. Coldwell Banker Agents sale more homes than anyone else. • Buyers will have the opportunity to view more properties exclusively. • And most importantly when you hire him you get a whole team working for you not just “only one person”. Ady Simion started his Professional Career as an Insurance Agent, and then mastered the Mortgage Industry focusing on helping buyers and sellers achieve their life dreams. He now is an Agent with the Largest Residential Real Estate Company in the nation and the world, Coldwell Banker, at the Pasadena office which is the leader in the areas in which he specializes. After finishing College Ady has consistently been a Top Producer in every office/business he worked at. He speaks English, Romanian and Spanish. Real Estate is constantly changing and working with an agent that has been involved in the Real Estate buying/selling process most of his life is always beneficial for clients. Call, text or e-mail him or just stop by to say Hi and ask any real estate questions you may have.

Posted on July 10, 2014, in Uncategorized. Bookmark the permalink. Leave a comment.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: