An article from the New York Times talked about how Chinese property buyers are expanding their reach when it comes to investing in US real estate. This time, the Chinese are not just purchasing condominiums in Manhattan or mansions in Silicon Valley -- they are now checking out properties in new markets such as Plano, Texas, an article from EFT Daily News said.
The Chinese are in the market for homes that are over $1 million. They also make up one of every 14 buyers -- which is a large percentage of the market. And they get higher at 50 percent or more when it comes to top tier markets located in San Francisco, Orange County or Manhattan.
Last year, Chinese real estate buyers paid $831,800 on average for a residential property for a total of $28.6 billion. The number is also more than double than the level just two years before!
Therefore, a lot of Americans in these key market cities the Chinese are buying into are not that happy with what is actually going on. With the Chinese increasing their buying power, they are pulling up the costs of real estate across the board and that is not all...
Around 69 percent of these purchases are made in cash; some US buyers are certainly unable to pay in cash! Locals need to apply for mortgage to acquire a property while Chinese buyers can simply close a real estate deal in a weekend.
However, there is a huge picture that must be considered. The Chinese are trying their best to get their money out of their country because of their volatile economy and, worst case scenario, before their government starts claiming it. Some Chinese families would like to send their children to American schools and universities in an effort to provide the best education. Still there are locals who would like to escape their country's pollution problem.
The US real estate market has just recently become more attractive whereas Chinese properties have become more expensive. There is also the fact that China's stock market has recently crashed making locals more cautious about all investments.
All of these factors have certainly caused an effect in the real estate market and will continue to do so until economic conditions and financial security improve in China.
