China's wealthy investing suburban Seattle real estate-NY Times (Vancouver, Bellevue: for sale, real estate market)

[phoenixmike11]

http://www.nytimes.com/2014/09/21/bu...rich.html?_r=0

[Hemlock140]

Yes, they have driven up the prices so high in Vancouver, BC that our less expensive luxury homes at only 2.5 million or less have become far more attractive.

[kyled]

This is one reason why China can't go to war against the US. If they did they'd basically forfeit all of their holdings in the US. Of course this gives the chinese government a lot of control over the US real estate market...some suggest part of the reason for the last few recessions was because of chinese and russian tinkering of the market.

[mkarch]

Interesting and all but the properties sold to Chinese nationals amount to 1-2% of sales. That's only enough to drive very small market segments in any significant way. Articles that quote "40-60%" figures within a loosely and ambiguously defined sub-market are close to meaningless. If they bothered to quantify the actual number of sales, the article would be " the Chinese like West Bellevue. They buy houses there" End of story.

[flyingsaucermom]

Originally Posted by mkarch

Interesting and all but the properties sold to Chinese nationals amount to 1-2% of sales. That's only enough to drive very small market segments in any significant way. Articles that quote "40-60%" figures within a loosely and ambiguously defined sub-market are close to meaningless. If they bothered to quantify the actual number of sales, the article would be " the Chinese like West Bellevue. They buy houses there" End of story.

Thanks for putting this into perspective. I'm sick of sensationalism and one would hope you don't find it in the NYT.

[Ira500]

Originally Posted by flyingsaucermom

Thanks for putting this into perspective. I'm sick of sensationalism and one would hope you don't find it in the NYT.

I'm not sure the article is all sensationalism. The article stated that of all the million dollar plus homes sold on the eastside, 20-40% are sold to Chinese buyers. When someone buys a house, there are no records that say "Indian buyer", "Jewish buyer", "Norwegian buyer", "Chinese buyer", etc. In a frenzied, low inventory seller's market, (which hopefully is easing some), something like a major influx on one portion of the market can have a ripple effect. Say you've just got hired for a great job at Microsoft and looking to buy a million dollar plus home on the eastside. If you combine already low inventory with additional folks in the buyer pool who are paying cash, you might need to buy either something less expensive, or something further away. When that happens, it will have an effect on the price and availability of those houses, and on and on.
So maybe the market impacted is not strictly West Bellevue or Medina. But the fact that there are a lot of Chinese buyers buying million dollar homes in west Bellevue is going to have very little effect on a 250,000 dollar house for sale in Kent.

[Blondebaerde]

Originally Posted by Ira500

I'm not sure the article is all sensationalism. The article stated that of all the million dollar plus homes sold on the eastside, 20-40% are sold to Chinese buyers. When someone buys a house, there are no records that say "Indian buyer", "Jewish buyer", "Norwegian buyer", "Chinese buyer", etc. In a frenzied, low inventory seller's market, (which hopefully is easing some), something like a major influx on one portion of the market can have a ripple effect. Say you've just got hired for a great job at Microsoft and looking to buy a million dollar plus home on the eastside. If you combine already low inventory with additional folks in the buyer pool who are paying cash, you might need to buy either something less expensive, or something further away. When that happens, it will have an effect on the price and availability of those houses, and on and on.
So maybe the market impacted is not strictly West Bellevue or Medina. But the fact that there are a lot of Chinese buyers buying million dollar homes in west Bellevue is going to have very little effect on a 250,000 dollar house for sale in Kent.

To this point, it's gotta be affecting what I'm arbitrarily calling "mid-tier market" in the Eastside specifically as-well. I'm watching friends struggle a bit finding what they want, at a fair price, and "all cash offers" from competitors are mentioned on-occasion.

I'm on thin ice in the details, because I don't do real estate for a living, but aren't there several major and somewhat-overlapping buyer segments, for Eastside and similar in-particular? Would guess savvy realtors have something like this, in far greater detail, taped to their respective bulletin boards:

Low end buyer: $125K - $350K. Very little inventory in this zone, outside of condos.

Mid-tier: $450-725K. Bulk of the sales?

High end: $750-2M. Many, but fewer than above, sales?

Luxury: $2M + . Not many properties, but those correctly-priced are snapped up in a timely manner, too.

Yes, the above isn't precise, I just made it up based on personal experience plus talking to peers and watching Zillow and Trulia (and Case-Shiller) closely for years.

My peers, age about 35-50 w/outliers, are at about the same level and thus income for various tech majors. They're aiming at what I arbitrarily called "mid-tier". That's where I bought a home, some years ago (post Recession) though the numbers were quite different due to prices increases since.

Also: my buddy absolutely, positively took an all-cash deal on his Bellevue house sale about a year ago, in the zone I'd call "mid-tier". "Chinese national" or not wasn't mentioned, but implied by his agent. Said-agent indicated, on the sly, that 9/10 times for mid-tier deals these days there is frequently at least one all-cash offer, also frequently from "Asian" (including Indian nationals and similar, I suppose) buyers.

Mid-tier was very competitive when buyers (in my approximate demographic) emerged from financial hibernation post-Recession. Unless I'm totally off-base, that segment is if-anything way hotter now, only a few short years later. Look at who wants to buy: tech professionals being hired by the thousands from all points of the compass! I know what most of them make, at each level, plus or minus $5K in salary. The vast majority want mid-tier. Some want high end, usually if they're young and staked by rich parents. Near-zero want Luxury; they'd be in other lines of work if they did (or trust fund babies).

I've have heard, anecdotally, from my friend's sister (realtor who was mentioned in a Seattle Times article a couple months ago) that indeed Asian all-cash money can upend the competitive landscape for properties she deals with: Mid-tier to High-end by the above, Eastside mostly.

I don't know anyone dealing in Luxury homes, that's not my crowd.

Thus this article doesn't surprise me much. It's going on, and has been going on, in various parts of the Seattle market at least awhile.

[Kalex]

a friend of ours had their next-door neighbor's house sell sight unseen in Bvue to a Chinese woman who already had two other houses there but "didn't like them". Then buyer's friend contacted my friend to try to convince her to sell her house so they could hang out near each other. Another friend is a Chinese translator for real estate agents and is so busy it's kind of insane. she's getting calls all.the.time. Anecdotal, but it's definitely happening here.

the NYT has been annoyingly sensationalistic lately - more than a couple articles loosely based on fact and becoming "big news" bc they're so out there. Disappointing.