Chinese all-cash buyers of U.S. homes have tripled since 2005
2015-10-14
Mandarin-speaking Chinese are buying mostly high-end homes with a median price of over $500,000
Xiāoshòu. That’s how you say “For Sale” in Chinese. And if you’re selling to an all-cash buyer in a U.S. real estate deal, you may need to find a real-estate agent who speaks Mandarin.
A joint analysis by Irvine, Calif.-based realty research firm RealtyTrac, and New Jersey-based multicultural marketing company Ethnic Technologies, found that 46% of Mandarin Chinese-speaking buyers who purchased U.S. homes in the 17 months ending in May 2015 paid all cash, more than triple the number paying all cash in 2005. Overall, Mandarin speakers are the second largest non-English speaking cash-paying group, totaling nearly 18% of all cash deals, second behind those buyers speaking Spanish at 43%.
Among all non-English speaking groups, the share of all-cash buyers of U.S. homes increased from a 20% share in 2005 to a 33% share in the 17 months ending in May 2015.
The two firms looked at 10 million publicly recorded residential property sales deeds in 2014 and 2015 compared with 2005 by ethnicity and native language spoken. The results were determined by predictive software that can determine ethnicity and language preference based on first name, last name, and address of the record, according to Lisa Radding, the director of research for Ethnic Technologies.
“Cash buyers across the board are playing a much bigger role in the housing market now than they were 10 years ago, and that is particularly true for Chinese Mandarin-speaking cash buyers, who are more likely to be foreign nationals,” said Daren Blomquist, vice president at RealtyTrac. “Foreign cash buyers have helped to accelerate U.S. home price appreciation over the past few years given that these buyers are often not as constrained by income as local, traditionally financed buyers,” he said.
Indeed, median home values in the U.S. have risen to $180,800, the highest level since mid-2008, and up 3.3% in the past year, and they’re projected to rise another2.2% in 2016.
Chinese Mandarin-speaking buyers also increased as a share of overall buyers more than any other language group between 2005 and 2015, up more than 9%, according to RealtyTrac. Other languages spoken increasingly by buyers were Hindi and Arabic, the research firm said.
Overall, Chinese buyers spent $22 billion on U.S. housing in the 12 months through March 2014 — 72% more than a year earlier, according to the National Association of Realtors, buying mostly high-end, expensive homes with a median price of over $500,000. Asian buyers make up more than a third of all international real estate buyers in the U.S., and Chinese investing in U.S. real estate is so popular that the Washington, D. C-based Association of Foreign Investors in Real Estate (AFIRE) offers its guide to real-estate investing in the U.S. in only two languages, English and Mandarin.
Also see: The danger of foreign buyers gobbling up American homes
OB Jacobi, president of Windermere Real Estate, a real-estate broker in Seattle, said that Chinese buyers account for almost half of all real estate activity in Seattle’s most expensive neighborhoods and says more than three-quarters of the real estate deals there are for cash. “Seattle is the closest mainland U.S. city to travel to from Beijing and offers things that really appeal to the Chinese, like clean air, quality education, and employment opportunities with several Fortune 500 companies,” Jacobi said. Seattle home prices rose 12% in the past year, and are expected to climb another 6.4% through 2016.
Ohio, Colorado and Southern California too are seeing plenty of all-cash Mandarin-speaking buyers, according to RealtyTrac and Ethnic Technologies.
“Annually since 2005, we have seen that destabilizing events around the world continue to increase the positioning for U.S. real estate, particularly Southern California, as a safe harbor for investment, particularly cash,” said Mark Hughes, chief operating officer with First Team Real Estate, a Realtor covering the Southern California market. “Given the somewhat laid-back Chinese government attention to withdrawal limits we expect these funds to continue to be a driver of activity and bidding throughout this year.”
Here’s how Mandarin speakers stack up versus all buyers when it comes to cash deals:
Xiāoshòu. That’s how you say “For Sale” in Chinese. And if you’re selling to an all-cash buyer in a U.S. real estate deal, you may need to find a real-estate agent who speaks Mandarin.
A joint analysis by Irvine, Calif.-based realty research firm RealtyTrac, and New Jersey-based multicultural marketing company Ethnic Technologies, found that 46% of Mandarin Chinese-speaking buyers who purchased U.S. homes in the 17 months ending in May 2015 paid all cash, more than triple the number paying all cash in 2005. Overall, Mandarin speakers are the second largest non-English speaking cash-paying group, totaling nearly 18% of all cash deals, second behind those buyers speaking Spanish at 43%.
Among all non-English speaking groups, the share of all-cash buyers of U.S. homes increased from a 20% share in 2005 to a 33% share in the 17 months ending in May 2015.
The two firms looked at 10 million publicly recorded residential property sales deeds in 2014 and 2015 compared with 2005 by ethnicity and native language spoken. The results were determined by predictive software that can determine ethnicity and language preference based on first name, last name, and address of the record, according to Lisa Radding, the director of research for Ethnic Technologies.
“Cash buyers across the board are playing a much bigger role in the housing market now than they were 10 years ago, and that is particularly true for Chinese Mandarin-speaking cash buyers, who are more likely to be foreign nationals,” said Daren Blomquist, vice president at RealtyTrac. “Foreign cash buyers have helped to accelerate U.S. home price appreciation over the past few years given that these buyers are often not as constrained by income as local, traditionally financed buyers,” he said.
Indeed, median home values in the U.S. have risen to $180,800, the highest level since mid-2008, and up 3.3% in the past year, and they’re projected to rise another2.2% in 2016.
Chinese Mandarin-speaking buyers also increased as a share of overall buyers more than any other language group between 2005 and 2015, up more than 9%, according to RealtyTrac. Other languages spoken increasingly by buyers were Hindi and Arabic, the research firm said.
Overall, Chinese buyers spent $22 billion on U.S. housing in the 12 months through March 2014 — 72% more than a year earlier, according to the National Association of Realtors, buying mostly high-end, expensive homes with a median price of over $500,000. Asian buyers make up more than a third of all international real estate buyers in the U.S., and Chinese investing in U.S. real estate is so popular that the Washington, D. C-based Association of Foreign Investors in Real Estate (AFIRE) offers its guide to real-estate investing in the U.S. in only two languages, English and Mandarin.
Also see: The danger of foreign buyers gobbling up American homes
OB Jacobi, president of Windermere Real Estate, a real-estate broker in Seattle, said that Chinese buyers account for almost half of all real estate activity in Seattle’s most expensive neighborhoods and says more than three-quarters of the real estate deals there are for cash. “Seattle is the closest mainland U.S. city to travel to from Beijing and offers things that really appeal to the Chinese, like clean air, quality education, and employment opportunities with several Fortune 500 companies,” Jacobi said. Seattle home prices rose 12% in the past year, and are expected to climb another 6.4% through 2016.
Ohio, Colorado and Southern California too are seeing plenty of all-cash Mandarin-speaking buyers, according to RealtyTrac and Ethnic Technologies.
“Annually since 2005, we have seen that destabilizing events around the world continue to increase the positioning for U.S. real estate, particularly Southern California, as a safe harbor for investment, particularly cash,” said Mark Hughes, chief operating officer with First Team Real Estate, a Realtor covering the Southern California market. “Given the somewhat laid-back Chinese government attention to withdrawal limits we expect these funds to continue to be a driver of activity and bidding throughout this year.”
Here’s how Mandarin speakers stack up versus all buyers when it comes to cash deals:
|
Language |
Percent of 2015 cash buyers |
Percent of non-English 2015 cash buyers |
|
English Speakers |
87.01% |
N/A |
|
Spanish Speakers |
5.54% |
42.69% |
|
Mandarin Speakers |
2.31% |
17.80% |
|
Hindi Speakers |
0.94% |
7.22% |
|
Arabic Speakers |
0.53% |
4.11% |
|
Native language |
2005 cash share |
2015 cash share |
Percent increase |
|
ChineseSpeakers |
14% |
46% |
229% |
|
All Buyers |
20% |
33% |
65% |
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