Cash-Paying Chinese Home Buyers in U.S. Have Tripled Since ’05
October 14, 2015
Mandarin-speaking Chinese home buyers in the U.S. are purchasing high-end homes with an average price of over $500,000. According to an analysis performed by realty research company RealtyTrac and multicultural marketing company Ethnic Technologies, 46% of these high-end buyers paid all in cash, which is more than triple the number reported in 2005. At almost 18% of all non-English cash buyers, they are only second behind Spanish-speaking buyers, who comprise 43%.
How Foreign Cash Buyers Are Affecting the Market
RealtyTrac and Ethnic Technologies used predictive software to gather the data about foreign cash buyers, which was able to determine ethnicity and language preferences according to names and addresses appearing on public property sales records.
Daren Blomquist, RealtyTrac’s vice president, determined, “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.
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.”
All in all, Chinese buyers spent a total of $22 billion on American housing from March 2013 to March 2014. That’s 72% more than the previous year, according to the National Association of Realtors.
Most of these buyers are purchasing homes over $500,000. It turns out, according to Windermere Real Estate president OB Jacobi, “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.”
English-speaking cash buyers of course make up most of the market for 2015, at 87.01%. Spanish speakers made up 5.54% and Mandarin speakers make up 2.31%.