Why are the Chinese buying up U.S. real estate?

Because they have money in their wallets, an appetite for the good life, and golden ants in their pants.

Without question, the Chinese are the largest international players here in the U.S. housing market. In fact, according to Karen Yan of JinList, Chinese purchases of U.S. residential properties will reach $32 billion ending in March 2015.

That's billion, with a “B.”

So where exactly are the Chinese buying up all of these residential properties?

According to the National Association of Realtors (NAR), the top states for residential Chinese buyers are California, Washington State, New York, Texas, Pennsylvania, and Florida.

The slowing of the Chinese economy and government restrictions on second and third homes are pushing these buyers into the hands of U.S. sellers of both commercial and residential properties.
U.S. luxury real estate has become a safe haven for Chinese investors.

Beers, Steers, and Willie Nelson

 Interestingly, Texas is one of the hottest spots for wealthy Chinese buyers. They seem to be most attracted to detached single-family homes and plan to use those homes for more than six months.

Texas in particular is attractive for its warm climate and low cost of housing — although one very wealthy Chinese investor who happens to work with my colleague Jeff Siegel claims he came for the great deals but stayed for the Willie Nelson connection.

Follow the Money

The Chinese have greater means to buy in the U.S. Roughly 63 million have the necessary capital to purchase properties, and 2.8 million of those are considered high net-worth individuals.

So how can you profit from the Chinese buyer?

The key for real estate brokers is to get their listings marketed across China before they land in the U.S. Essentially, it's a lucrative way to entice Chinese buyers that are ready to purchase. These buyers want a “secure investment,” and they continue to find it in U.S. real estate.

The NY Times recently ran an article forecasting that 47% of all second-home sales in 2015 would be from international buyers. The Chinese are the most powerful international group — a group so large that it can immediately impact an entire market.

Additionally, these buyers tend to be very well educated, so there is a reason they are choosing the areas they do.

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