San Gabriel Valley Real Estate:
Affluent Chinese Buyers Push Area Prices Upwards
Demand For L.A. Area Homes Among Wealthy Chinese Drives Market
The San Gabriel Valley is at the very heart of what is driving the Southern California real estate market at the present time, and that’s the influx of wealthy Chinese buyers, both investors and primary home buyers, who want to purchase in the area. This demand has now pushed prices up past the levels we saw during the boom of the last decade. What’s happening is that many Chinese investors are moving money out of Mainland China and into Southern California. This is changing the nature of the market in the area.
As a result of this influx of money, the market here in the San Gabriel Valley is moving quickly and is not for the squeamish. Buyers who require home loans need to get their “ducks in a row” before getting involved. They need to realize that they will be going up against cash buyers who are willing to pay top dollar and make offers with little to no contingencies. These types of buyers can also offer sellers very short escrow periods which can bedifficult to match by anyone requiring a loan. Cultural influences also affect the market. For instance, Sellers serve themselves well if they are conscious of feng shui practices when staging a home for sale.
Here’s a detailed article by E. Scott Reckard and Andrew Khouri in the Los Angeles Times:
http://www.latimes.com/ Mon, 24 Mar 2014
The overflow from China’s economic high tide is transforming the housing markets of suburban Los Angeles. Affluent Chinese home buyers are driving prices past boom-era peaks, spawning a subset of property brokers and mortgage lenders that cater to their distinct needs — and even dictate design details in new subdivisions.
Trend Not Likely To End Soon
As stated in the article, at this point about 60% of China’s wealthy citizens have left the country or intend to … at least part time … very soon. The preferred destination is Southern California and this is creating high prices and lots of activity. Many of these homes are being purchased as investments or second homes for part time use, and this type of Buyer, generally speaking, behaves in a different way than a primary home buyer might. This creates market conditions that tend to vary from what many buyers and sellers expect.
At this writing the trend is still on the rise. In fact, the influence of Wealthy Chinese buyers seems to be spreading eastward as areas like Riverside and San Bernardino are now being seen as inexpensive investment opportunities.