Stories in the New York Times and the San Francisco Chronicle this week point to Chinese billionaires driving a mini-boom in US luxury real estate.
According to the New York Times, there is so much demand among Chinese wealthy individuals for US luxury housing that brokers for Sotheby’s and other upper end property firms have started taking Mandarin classes. Apparently, the State University of New York’s Confucius Institute for Business, a program that began in early 2011 is seeing a lot of interest from real estate brokers eager to sell to the Chinese.
And since brokers are nothing if not financially motivated, here are some of the financial trends driving this interest in Mandarin and feng shui.
Citing Dolly Lenz, the vice chairman of Prudential Douglas Elliman in New York, The Times reports that, “Chinese billionaires continue to buy high-end properties in buildings like the Time Warner Center, 15 Central Park West and the newest, One57. But in May and June she (Lenz) saw something different: an “almost overwhelming volume” of calls and sales driven largely by interest in apartments ranging from $3 million to $6 million — what Ms. Lenz calls the “middle market” in Manhattan.”
On the other end of America, the San Francisco Bay area is also seeing a surge of interest from overseas buyers, including Chinese. A feature story this week in the San Francisco Chronicle noted that, “Drawn by the relative bargains after housing’s free fall of the past few years, many foreign citizens view U.S. residential real estate as a safe place to park their euros, pesos, rupees, loonies, pounds or yuan.”
The Chronicle interviewed Jed Kolko, Chief Economist for real estate web site Trulia, who pointed to San Francisco’s high level of appeal internationally. According to Kolko, , about 6 percent of all Trulia.com searches for homes in the Bay area property searches come from foreign buyers. The site gets 100 million page views per month, and San Francisco is by far the most popular search location for foreigners.
Back in New York, the results for brokers appear to be more clear cut.
According to Nikki Field of Sotheby’s, from meetings with 37 Chinese potential clients, her team was able to sign nine contracts or otherwise close deals on Manhattan properties so far this year. Prices for these homes ranged from $3.5 million to $50 million and most were at the One57 development.
Now more groups are getting involved in organising trips to the US for Chinese house hunters. Yue, a bilingual Mandarin-English luxury lifestyle magazine, is organizing a real estate conference in New York in October, and more than 150 of Sotheby’s potential clients are expected to attend the conference where Ms Field is scheduled to present.