Chinese Investors Flock to California and Probably Elsewhere
Jann Swanson | Mortgage News Daily | Nov 5 2013 | link
MND has published a number of stories from the California Association of Realtors® and DataQuick about the staggering home increases that have hit Northern California residential real estate. Mark Berniker and Josh Lipton, writing for the CNBC website, now provide what could be a partial explanation: computers.
Not just computers but cell phones, notebooks, the Internet, and all of the other technology that surrounds them and what has become shorthand for the lot, the Silicon Valley. This nickname originally was coined in the 1970s for the Santa Clara Valley but has expanded to include much of the San Francisco Bay area. The median price for a home in the Santa Clara Valley in September was $778,000, an increase of 19.7 percent since September 2012, and in San Francisco the median was $858,300, up 26.6 percent.
In good times the Silicon Valley attracts engineers, coders, and support staff from all over the country, making the area boom and driving up home prices. Times are very good for hi tech today.
But Lipton and Berniker point to something else that is going on, “With tech stocks surging and IPOs sprouting up left and right, the area is in the midst of a real estate bonanza that’s attracting a wave of buyers from China.”
Real estate agent Ken DeLeon told CNBC that he had sold more than 20 luxury homes in the area to buyers from mainland China, Taiwan, and Hong King, mostly in the $2 million range and higher and recently bought a Mercedes bus to shuttle his Chinese customers to home viewings.
Chinese investors are not confining their interests to the Silicon Valley, however. SRE Real Estate Investments reports that international real estate investors and developers primarily Chinese, are snapping up properties throughout the Los Angeles area. The firm cities several specific factors pulling the Asia money into U.S. real estate. These include the improved economy, stability of return on investment and liquidity in the market.
Jay Belson, CEO of SRE said the Chinese development firms are investing in a range of different property types but their interest in residential properties seems to be growing in particular those close to military bases and hospitals as well as near universities and other education centers.