As the
Chinese economy continues to boom, Chinese are looking abroad to spend money on
real estate.
Where
are they buying?
More
surprisingly, Philadelphia and Detroit come in at No. 3 and No. 4.
The top 10 list
is rounded out by Houston , Chicago , Las Vegas , Atlanta , San Diego and Memphis .
Chinese
buyers purchased $8.2 billion worth of U.S. property in 2012, according to Juwai.
It ranked cities by how many searches they attracted from Chinese house
hunters.
This is
a welcome clientele for U.S. sellers. The median home price among
Chinese buyers was $425,000 in 2012, compared with the overall median U.S. home price of $199,500.
And the
transactions are often quick and clean: 70% of the Chinese buyers pay cash,
according to the National Association of Realtors.
Buyers
have different reasons for picking a city.
Others
seek homes near colleges their children can attend.
And the
wealthiest of these Chinese buyers are looking for economically strong cities,
using U.S. real estate to diversify their
investments.
"They
look at these as a safe haven for their money," said Pam Liebman, CEO of
broker the Corcoran Group.
Wei Min
Tan, a broker with Rutenberg Realty in Manhattan , said that most Chinese buy to rent
out, or for sporadic use themselves.
"They
often have kids in school somewhere nearby and they fly into New York , spend a few days and then go on to
visit their kids," he said.
He added
that most of these New York City sales are in the $1 million to $3
million category. "Rarely do they buy the trophy properties -- $15 million
and up -- that make the news," said Tan.
Cities
like Detroit and Memphis are more appealing to Chinese looking
for predictable, steady cash flow, according to Juwai. They're snapping up
foreclosures and other heavily discounted properties, fixing them up and
renting them to local residents. They hire local managers to take on the
day-to-day maintenance and collect the rents.
In the
case of Detroit , the buyers often don't even do
repairs right away, according to Rachel Saltmarshall, president of the Detroit
Association of Realtors.
They're
buying at tax sales and foreclosure auctions and holding the properties,
sometimes keeping them vacant, hoping that the city's comeback is imminent.
Downtown Detroit is going through a renaissance,
according to Kelly Sweeney a local real estate broker for Coldwell Banker Weir
Manuel. "The Chinese are making bulk purchases of inexpensive properties,
$25,000 or less, in the rings around downtown," he said. "They're
banking on the downtown resurgence spiraling out into those rings."
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