Seattle (Especially Eastside Suburbs) Becomes No. 1 U.S. Market for Chinese Homebuyers/ Investors

Posted by Cary W Porter on Friday, September 16th, 2016 at 11:23am

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Mike Rosenberg Seattle Times business reporter:

There’s been a large increase this year in Chinese buyers looking for property in the Seattle area, and a new tax on foreign buyers in Vancouver, B.C., is expected to amplify the trend.

A growing wave of money from China and other foreign countries is pouring into the Seattle-area housing market, helping drive home prices even higher. And since July a new tax on international buyers in Vancouver, B.C., long a popular market for home seekers from China, has focused even more global interest here.

Seattle saw more inquiries from mainland-Chinese homebuyers than any other American city in four of the last seven months, according to Juwai.com, China’s biggest real-estate site for buyers looking in North America.

Historically, Seattle had attracted less real-estate money from China than Los Angeles, New York and San Francisco.

But the region’s upward shift only accelerated after British Columbia enacted a 15 percent tax on foreign buyers in the Vancouver metro area. Searches by Chinese home seekers for Seattle have more than doubled, while they’ve been cut nearly in half in Vancouver, Juwai says.
 

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Local real-estate agents say they’ve seen a sharp rise in foreign buyers recently, both those looking to move to the Seattle area and those buying the homes merely as investment properties, sometimes keeping them empty.

The Puget Sound region’s biggest attraction for many foreign buyers is that its housing costs — while soaring higher in recent years — remain far lower than peer West Coast hubs or other international hot spots.

Chinese buyers tend to come in with all-cash offers, and have made this area a lot pricier.

Of course (local) sellers love it: ‘All right, I’m getting an all-cash offer with no contingency,’ ”. But for local buyers, the overseas interest means “they certainly face competition. Some buyers are not happy; foreign buyers pose a threat, or strong competition.”

Some real-estate brokers and buyers are worried the region will follow in Vancouver’s footsteps. There, local officials who pushed for the foreign-buyer tax say international buyers helped price out longtime residents and often left investment homes empty, reducing the overall housing stock and helping prices soar more than 30 percent in a year.

Overall, buyers from China bought about $1.6 billion in homes across Washington last year, according to the National Association of Realtors. The state drew 6 percent of the $27 billion that Chinese spent buying U.S. homes last year, putting Washington behind only California, New York and Texas.
 

Still, the Seattle region is nowhere near catching up to the land rush experienced in British Columbia, which had about $760 million of home sales to Chinese buyers just in a one-month stretch earlier this year, according to news reports. Chinese money now accounts for about 55 percent of all homes purchased by foreigners in Washington, the Realtors association says.

Most of those purchases are still in the suburbs, particularly in wealthier areas on the Eastside.

According to Juwai, Chinese buyers are predominantly targeting luxury homes, with an average price of $1.2 million.

Part of the reason for Seattle’s rise to the top of most-searched American markets is that other major cities had “already had their gold rush” in recent years, and it’s Seattle’s turn now. Still, on a global scale, Seattle remains behind other top international destinations such as Toronto, Melbourne, Sydney and London for Chinese capital seeking residential real estate, Juwai’s data shows.

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