Analyst's note: There is no question that Obama is Conducting a Foreign Invasion of U.S., Endgame is Chilling. We also now learn that the Chinese "... want new home construction. They want two levels. In China, it is considered a mansion if it has two levels." So we can see that we have poor "illegal immigrants" from South America and the Chinese rich all taking over parts of California. What possibly could go wrong with all this ....?
"Real estate is well back in bubble territory in some places, notably California. It won't end any differently this time for the buyers, but at least banks will not be on the hook for all of the loans."
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Real estate is well back in bubble territory in some places, notably California. It won't end any differently this time for the buyers, but at least banks will not be on the hook for all of the loans.
All cash buyers from China are bidding up the price of mansions, defined as anything with two stories.
Bloomberg reports Chinese Cash-Bearing Buyers Drive U.S. Foreign Sales Jump.
Henry Nunez, a real estate agent in Arcadia, California, met with so many homebuyers from China that he bought a Mandarin-English translation app for his phone.
The $1.99 purchase paid off last month, when he sold a five-bedroom home with crystal chandeliers, marble floors and two kitchens, one designed for smoky wok cooking. The buyers were a Chinese couple who paid $3.5 million in cash.
Buyers from Greater China, including people from Hong Kong and Taiwan, spent $22 billion on U.S. homes in the year through March, up 72 percent from the same period in 2013 and more than any other nationality, the National Association of Realtors said yesterday in its annual report on foreign home purchases. That’s 24 cents of every dollar spent by international homebuyers, according to the survey of 3,547 real estate agents.
Chinese buyers paid a median of $523,148 per transaction, compared with a U.S. median price of $199,575 for existing-home sales. While Canadians bought more houses than the Chinese, they spent less -- a median of $212,500 per residence, for a total of $13.8 billion.
Chinese bought 32 percent of homes sold to foreign buyers in the state, double the share sold to Canadians, according to an April survey by the California Association of Realtors. About 70 percent of international buyers pay cash, the survey showed.
Buyers from China are driving up prices and fueling new construction in Southern California areas such as Arcadia, a city of about 57,500 people with top-rated schools, a large Chinese immigrant community and an array of Chinese restaurants and markets.
The median home price in Arcadia’s 91006 ZIP code was $1.28 million in May, up 18.5 percent from a year earlier, according to research firm DataQuick.
“About 90 percent of my buyers are from China,” said Peggy Fong Chen, a broker with Re/Max Holdings Inc., who sold 80 homes in Arcadia last year. “They want new construction. They want two levels. In China, it is considered a mansion if it has two levels.”
Chinese investors are moving into development in Arcadia, Chen said. They are buying lots with homes built in the 1970s and ’80s, tearing them down and erecting sprawling houses like the one Nunez sold for $3.5 million, which has a double-height entry hall and wood-paneled library.
“Local people really cannot afford these most of the time,” Chen said.
Buyers from China and Asian-Americans purchased about 80 percent of the 47 houses sold at Tri Pointe Homes Inc.’s Arcadia at Stonegate community in Irvine, about 40 miles southeast of Los Angeles, according to Tom Mitchell, president of the Irvine-based builder.
Almost half of the buyers paid cash for houses in the development, at prices starting at $1.16 million, he said. The company has been surprised by how word travels among overseas buyers.
“A Chinese national bought one of our houses at Arcadia in Irvine after reading about it on a blog,” Tri Pointe CEO Doug Bauer said in a telephone interview. “It was a Chinese blog. We couldn’t even read it.”
The share of money arriving from China is likely to keep growing, according to Lawrence Yun, chief economist for the Realtors.
“It’s just the beginning of a tidal wave,” he said in a telephone interview.
Overseas buyers are changing Arcadia, according to Nunez, 55, who has lived in the city since he was 6 years old.
“You drive every street and there are three or four new houses being built,” he said. “It’s just incredible, the demand.”
"Beginning of Tidal Wave"
Lawrence Yun, is Chief Economist and Senior Vice President of Research for the National Association of Realtors.
As for the "beginning", I seem to recall similar statements from the NAR made in 2005. Of course, when you are dealing with the NAR, no matter when or where, there's "never been a better time to buy than now."
Nonsensical statements marked the peak of housing insanity in 2005.
Please recall that disgraced former NAR chief economist, David Lereah timed the exact peak in the the housing bubble with his book Why the Real Estate Boom Will Not Bust - And How You Can Profit from It.
The reviews are hilarious.
Today's Raison d'être
Today's Raison d'être from the NAR is the “It’s just the beginning of a tidal wave.” Yeah, right. Beginning of the end of the echo bubble is more like it.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Read more at http://globaleconomicanalysis.blogspot.com/2014/07/22-billion-in-california-homes-sold-to.html#GzVsr4x1QPPWbmrG.99
