China’s interest in purchasing U.S. real estate is seemingly only in its infancy, but it is picking up at an incredible pace, particularly in California’s Bay Area.
According to the San Francisco Chronicle‘s website sfgate.com, the style in which the Chinese are buying real estate could be a force in driving up prices in the already hard-to-touch Bay Area.
Upon returning to San Francisco from a 14-hour flight, CEO Mark McLaughlin of Pacific Union — which describes itself as the leading luxury real estate brand in Northern California — discovered his voicemail had been filled with messages from a Chinese developer he had met at a dinner there, sfgate.com writes. The developer had beaten him back to San Francisco on his private Gulfstream. “That’s how fast these guys are prepared to move,” says McLaughlin of the developer, who had reportedly put a $60-million offer on the development deal.
But while Chinese buyers move fast, they also hold onto those properties for a very long time. The trend concerns McLaughlin, as it results in a lack of turnover, which in turn could cause inflation in places like San Francisco, where there is low inventory to begin with. While high-end U.S. buyers are likely to purchase a $5-million property and then sell it a few years later to buy a $10-million property, Chinese buyers tend to buy, hold, and then buy more. McLaughlin cites a recent Chinese buyer who purchased a $2-million-plus property in Seacliff because they just had a baby and were planning to move to America in six years for kindergarten.
Pacific Union has made some tremendous headway in bridging the gap between China and the Bay Area by catering to that country’s needs. Come May 15, a bilingual “Chinese Service Concierge Desk” will be launched by Pacific Union, as well as a Mandarin/English website hosted on a Chinese server. Instead of waiting for China to come here, they’re going to China, a move that is appreciated by Chinese.
But when Chinese clients say they want a home in San Francisco, that could really mean anywhere from Calistoga to San Jose. One wealthy buyer, for example, told McLaughin that he had $20 million to spend on a San Francisco home and wanted to be near the founders of Facebook and YouTube, which meant Palo Alto.
Currently, the most expensive real estate listing in the United States is a $125 million parcel of land spanning over 258 acres in Bel Air, California.