Chinese Investors in Los Angeles
According to a recent article on CNN.com, there’s an untapped market of potential homebuyers out there. They are snatching up properties of all shapes and sizes across Los Angeles, and they pay cash.
Last year, according to Juwai.com, a Chinese real estate site, Chinese buyers acquired $8.2 billion of US real estate. Much of that real estate was from the Los Angeles area. In fact, only New York tops Los Angeles in terms of Chinese investment.
Chinese buyers typically invest in a higher-quality home than the average American. The median price for home purchased by Chinese investors in 2012 was $425,000. The median US home price is $199,500
Chinese buyers are also interested in closing quickly. Financing is not easy to obtain in China, so Chinese investors normally come with cash in hand to closing. According to the National Association of Realtors, 70-percent of all sales were cash sales, and you can rest assured the remainder involved a sizeable down payment.
The Chinese investors have a variety of reasons for investing in a particular city. In the case of Los Angeles, the appeal is three fold.
- Los Angeles is a stable real estate market and serves as a safe haven for their money.
- Los Angeles has a large, strong Asian community, and many of the investors have family in the area.
- Many of the investors have children who attend one of the many prestigious universities in the area, and the parents like to have a place they can use when they come to visit their children.
Regardless of their reason for investing in Los Angeles, those wishing to attract these buyers need to educate themselves on certain aspects of the Chinese culture that could affect how they view a property.
The principles of Feng Shui play an important role in the Chinese culture, and Chinese investors will often view a potential property through that filter. For example, a north-facing home is considered very bad luck in the Chinese culture.
Some Chinese people are also very concerned with numbers and their mystical meanings. In the Chinese culture, the number 8 is considered lucky because of its association with the word for prosperity. Conversely, the number four is considered unlucky because of its association with the word for death.
Understanding these and other cultural mores will go a long way towards attracting this potentially lucrative section of the market.
To learn more about the recent influx of Chinese investors and read the whole article, click here.
Susan Andrews | Estates Director
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Susan Andrews is your ultimate real estate source for Los Angeles, California and surrounding communities.
Photo courtesy of CNN.com