San Francisco a Top Destination for Chinese Investment

Chinese investment in U.S. residential and commercial real estate has surged in recent years, with Chinese buyers acquiring more than $93 billion worth of residential real estate and $17.1 billion worth of commercial properties between 2010 and 2015, according to a new report.

Half of those commercial transactions and one-third of the residential deals took place last year alone, with San Francisco one of the key locations for investment. And analysts say the numbers are likely to continue rising in the years ahead.

The investment data comes from a report titled “Breaking Ground: Chinese Investment in U.S. Real Estate,” which was released Tuesday in San Francisco by the Asia Society, which co-authored the report along with the Rosen Consulting Group. Pacific Union was one of its sponsors.

Residential purchases by Chinese buyers since 2010 were concentrated in California, with 35 percent of all Chinese home purchases in 2015, according to the report. Washington state followed with 8 percent of purchases and New York with 7 percent.

Most commercial purchases were in just three cities: New York, Los Angeles, and San Francisco. New York had the largest transaction volume by far, $9.56 billion from 2010 to 2015, followed by Los Angeles, with $1.68 billion, and San Francisco, with $881 million. Together, they accounted for 71 percent of all U.S. commercial transaction volume.

The report noted that China in 2015 surpassed Canada as the largest foreign buyer of U.S. residential properties. China accounted for 16 percent of all such home purchases last year — an estimated 33,000 homes — up from 9 percent in 2010 and just 5 percent in 2007.

The report also noted that 2013 was the first year that Chinese direct investment into the U.S. exceeded U.S. investment into China.

“Policymakers, business leaders, and the general public in the United States still do not have a comprehensive understanding of the patterns and implications of Chinese investment in the United States,” according to Bruce Pickering, executive director of the Asia Society Northern California, and Jonathan Karp, executive director of the Asia Society Southern California, in the report’s introduction. “This report paints a clearer picture of what these investments mean for this country.”

Regarding the federal government’s controversial EB-5 visa program, which extends immigration visas to foreign individuals who invest $500,000 or more in U.S. real estate development, the report found that such visas generated at least $9.5 billion in Chinese investment and helped create 200,000 jobs over the past five years.

The report noted that San Francisco ranks among the top five cities in the world for real estate investment capital. It placed fourth on the list in 2015 behind New York, London, and Los Angeles, and ahead of Berlin.

(Image: Flickr/Markgranitz)

Article and images sourced from http://blog.pacificunion.com/san-francisco-a-top-destination-for-chinese-investment/

Benchmark Mortgage Rate Dips on China’s Market Chaos

With China’s stock market rout rattling the markets near and far, and a subsequent flight to quality driving the 10-year Treasury yield down, the average rate for a benchmark 30-year mortgage slipped back below 4 percent over the past week.

At 3.97 percent, the current 30-year rate is 24 basis points above the 3.73 percent rate recorded at the same time last year, according to Freddie Mac’s mortgage survey.

And with the markets spooked, the probability of a second rate hike by the Fed in March has dropped from 56 percent at the end of 2015 to 44 percent today.

Article and images sourced from http://www.socketsite.com/archives/2016/01/benchmark-mortgage-rate-dips-on-chinas-market-chaos.html

Bay Area a Top Destination for Buyers From China — and From France and Russia, Too

It’s no secret that the Bay Area is a popular destination for international homebuyers, particularly those from China, but two new reports from the National Association of Realtors add tantalizing details.

Canadian residents account for the largest share of international U.S. home purchases (19 percent), but buyers from China (No. 2 at 16 percent) hold the lead in dollar volume, purchasing $22 billion in property with an average sales price of $590,826, according to NAR’s2014 Profile of International Home Buying Activity.

Chinese buyers tended to purchase properties in higher-priced markets such as California, Washington, and New York, according to the report, while Canadians bought in lower-priced markets such as Florida and Arizona.

China was also the fastest-growing source of international transactions, accounting for 16 percent of all purchases in the year ended March 31, up 4 percent from the previous year.

San Francisco was the second-most-popular destination for Chinese homebuyers, trailing Los Angeles but ahead of Irvine, Calif.; New York City; and Las Vegas.

In a separate report, NAR said that San Francisco was also a top destination for buyers from France, Russia, New Zealand, and Singapore who conducted property searches on Realtor.com in May.

Favorable exchange rates, affordable home prices, and rising affluence abroad is driving interest among international buyers.

NAR estimates total international sales at $92.2 billion over the past year, up from $68.2 billion in the previous 12 months. Four states accounted for 55 percent of purchases by international buyers: Florida (23 percent), California (14 percent), Texas (12 percent), and Arizona (6 percent).

Pacific Union has been at the forefront of efforts to smooth transactions for Chinese buyers in the Bay Area. Last year, we launched a groundbreaking China Concierge Program to serve that demographic while also giving our Northern California clients access to a new set of buyers. And in May, Pacific Union rolled out aMandarin-language website hosted in China in order to offer homebuyers in the country better access to Bay Area property listings.

Last year, Pacific Union CEO Mark A. McLaughlin was one of just 10 U.S. executives invited to a series of meetings at the U.S. Embassy in Beijing, where he met with some of China’s wealthiest individuals to discuss U.S. real estate investment opportunities.

(Image: Flickr/Reizenbee)