Seattle sees a surge in Chinese real estate buyers
Updated: 2015-01-05 06:55
By LINDA DENG in Seattle(China Daily USA)
Potential Chinese investors crowd at Realogics Sotheby’s International Realty (RSIR)’s booth at the 2014 Luxury Properties Showcase in Shanghai at the Marriott City Centre on Dec 13. According to The National Association of Realtors and AREAA research, foreign home buying in the US is expected to surpass $92 billion in 2014 led by Canadians in total unit volume, however, Chinese buyers will represent the fastest growing and greatest dollar volume. Provided to China Daily
Some Seattle-area homes are being built or remodeled to improve their feng shui, to attract Chinese buyers.
Specialized local brokers who are fluent in Mandarin and understand feng shui are seeing an advantage when working with buyers from China. These are some of the signs of Chinese influence on the local real estate market.
"We are witnessing exponential increases of Asian homebuyer interest in the Pacific Northwest, especially from" the Chinese mainland," said Dean Jones, president and CEO of Realogics Sotheby's International Realty (RSIR) at the 2014 LPS (Luxury Properties Showcase) in Shanghai at the Marriott City Centre, which was held in mid-December.
The Hurun Report says a majority of millionaires in China want to invest in and plan to eventually live in North America. The Seattle-Bellevue metro area has been a hot destination for Chinese seeking real estate.
Wealthy Chinese homebuyers have flocked to the United States, spending $22 billion on property, tops among all foreign purchasers from March 2013 to March 2014, according to the National Association of Realtors.
That was up from $12.8 billion the previous year, when Chinese buyers also took the No 1 spot. The homes had a median purchase price of more than $500,000, which again topped other international clients.
Washington state received a hefty share of attention, ranking second only to California in sales to Chinese buyers.
This year, Chinese visitors are on pace to top the list of international travelers to the Evergreen State. More than half of the 7,300 international students at the University of Washington in Seattle are from China.
"As an international company, we see international buyers' increasing interests in a different lifestyle here, and most importantly, they can afford it," Jones told China Daily.
Many factors have boosted this trend.
Chinese nationals have further discovered that the Seattle metro area is an attractive tourism alternative to other West Coast markets. It has helped that numerous direct flights offered by competing carriers at Hainan Airlines and Delta Airlines means tickets are typically cheaper than in other cities.
Sea-Tac Airport is the closest mainland US airport to China and offers direct flights to Hong Kong, Shanghai and Beijing.
The quality of the public schools also is a major factor when Chinese buyers consider a home in the US.
"They feel that paying property tax at 1 percent of assessed home value is a small price for an education provided by the best public school districts, found on the Eastside and on Mercer Island," according to RSIR.
The lack of a state income tax in Washington offers further incentive to invest there over California or Canada, where the combined tax rates (and real estate values) are much higher, and the economies are not as strong. The Puget Sound region is bustling with economic prosperity, and the Growth Management Act has forced much of the anticipated expansion to occur within urban areas.
The Seattle metro area may be globally undervalued when compared with other West Coast gateway markets. The median household incomes are among the highest among peer cities, yet real estate values are typically a third to half those of some world cities properties.
Markets such as Vancouver, San Francisco and Los Angeles already have become "hedge cities", where decades of immigration and foreign direct investment have caused property values to rise well above what would be normally supported from job and population growth alone. Savvy Chinese nationals realize that this is the harbinger for the Seattle area.
Most Chinese buyers look for waterfront properties in the Seattle-Bellevue area. "They love the waterfront-living style, but there are few opportunities to live by the lake or sea, especially near large cities in China," Jones said. "It is also a great investment."
During the Asia-Pacific Economic Cooperation meeting in Beijing in November, US President Barack Obama and Chinese President Xi Jinping announced that business and tourist visas would be extended from one year to 10, and student visas would be valid for five years, also up from one year. The extensions are in effect in both countries.
"We are downstream from what I believe will be a steady flow of housing demand stemming from China, akin to what we've all seen before in Vancouver, BC, San Francisco and Los Angeles. Now the current is flowing into Seattle, given our proximity, prosperity and propensity for capital appreciation – we're the next market on the rise."