U.S. housing market in recovery...thanks to China?
It's not just institutional investors that have beenpropping up the U.S. housing market. Foreign buyers are also buying in. The National Associationof Realtors is reporting that international buyers accounted for $92.2billion of U.S. home sales during the 12 months ending in March 2014-- 35%higher than the same period a year earlier.
"This is actuallygood news ... and is helping the U.S. housing market recover although it's nothelping it recover nationwide," says Rick Newman, senior columnist atYahoo Finance. "This tends to be in coastal markets: Los Angeles, SanFrancisco, New York, to some extent Florida."
Related: $100 million homes: Thenew normal?
The NAR reports thatfour states -- Florida, California, Texas and Arizona -- accounted for 55% offoreign purchases of U.S. homes, with Florida alone grabbing a 23% share.Europeans are generally attracted to states with warmer climates such asFlorida and Arizona while Asian buyers tend to favor the West Coast in partbecause they're attracted to states like California with large IT companies,the NAR reports.
Related: The growing wealth dividein the U.S. housing market
Just over half ofthese buyers came from a handful of countries: Canada, China, Mexico, India andthe U.K., according to the NAR. China led in dollar volume of purchases: $22billion, while Canada had the largest share: 19%. About 60% of foreignpurchases were all cash, according to the NAR.
"The Chinese realestate market is overheated. It seems ready to bust...so they want to get theirmoney someplace that seems more stable," says Newman. Many Chinese buyersare investors but some are coming to the U.S. to live so their kids get a U.S.education and learn English, says Newman.
Related: Why the housing market is suddenly struggling
Although foreign purchases of U.S. homes have helped revivethe U.S. housing market they also "might have masked what's really goingon in the housing recovery," says Newman. "It tells us where thathousing recovery came from last year." And it helps explain why thehousing market is slowing this year.
"There are a lotof markets that haven't recovered as much as these hot coastal marketshave," says Newman. "A lot of people are struggling to get a downpayment...They're not earning enough money...They can't get a bank loan...Thesethings are still holding back the housing market...It's going to take a fewmore years until we get back to normal."
david 1 hour ago
This is not good follewers! China and Russia continue to buy alot moregold while the US continues to print money and borrow from China. There buyingour real estate and when we cannot afford to pay back anymore than the interestand they want there money back; guess what, collapse and now they own us. Noone has ever got ahead by spending more and borrowing! Chinese will be the newlanguage, luckily il probably be dead by then. Good night suckers!
Hank 4 hours ago
Chinese cash buyers are also in Washington State. But the trend seems tohave peaked in early 2013. Many of these folks are laundering money, btw. Theyuse accounting gimmicks to get cash out of China, and have their parents orchildren living in the houses.
Lars 4 hours ago
This is no secret the chinese have invaded CA with trunk loads of cashbuying up anything that makes sense.
Caty 2 hours ago
Japan bought mostly commercial buildings decades ago, including the EmpireBuilding,
they learned a hard lesson. Sold Empire Building at 50% loss.
Mac B 2 hours ago
Only Chinese and Indian are buying my neighborhood.
Bring the price higher
a man with a vision 1 hour ago
not thanks to China , more like never. Chinese people in America havemoney '' RICH '' because they made money off the OUTSOURCING. so that'sAmerican money.
robert 1 hour ago
I remember my dad telling me that he read somewhere that some Muslimprophet had said that the yellow race would take over the world. With thenumber of Chinese and the way they're buying the world, I think the Muslim guywas right!
SHS 4 hours ago
What else is new...jobs, steel, and most goods have been getting sold outto China since Reagan
MARK A 7 hours ago
China has our jobs, our debt, our competencies, and now they are going toown our houses. Bring the jobs back and we won't have to borrow their money andwe can keep our houses
IT Manager 7 hours ago
China has ruined our Real Estate market. We're stupid to allow foreign,non-US citizens the ability to buy US land. This has ruined the market forAmerican families. China is evil, and so are its despicable people.
Savior 55 minutes ago
Great news. I hope The US collapses and the Chinese take over. If ratherlive next to a Chinese than live with a racist right-wing #$%$. Thank you,China. Keep buying please.
peter 32 minutes ago
thanks to China?...no way...thanks to the fed for keeping the interestrates so low for so long....
m 2 hours ago
remember Chinese dry wall? china products = poison
IKE 1 hour ago
We best not peeve the Chinese off....they hold some trump cards now
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