Chinese Buyers Palos Verdes Homes
For the Chinese Buyers Palos Verdes homes market place, many of my selling clients have asked me what kind of Chinese real estate connections I have that can help my clients’ homes get more exposure. And we all know the basic marketing principles right? More exposure, compressed in time equals a faster sale at a higher price.
I’ve affiliated with some of the largest real estate brokerage organizations in Hong Kong, Taiwan and China to create a direct pathway for Chinese buyers to Palos Verdes. Coupled with one of my partners here at Call Realty, Margarat Wang, we have both our Chinese clients and our sellers of Palos Verdes homes well taken care of.
Some of my clients have asked me about the process by which a Chinese client buys Palos Verdes real estate. Here’s a typical story line as told by one of my affiliates as to how things unfold.
Many Agents are asking how we operate so we have published an article around this:
Mr. Liu is a business man living in Zhengzhou, which is the capital of a lesser-known province in the middle of China called Henan. After years of hard work, he has a successful career and a happy family with two lovely children. Is he all settled? No, he wants to move across the world to the U.S. and educate his children in a great school.
Chinese buyers have become the largest group of foreign investors in the US and are estimated to have spent about 22 billion last year on US real estate. And much of that investment was motivated by buyers who want to educate their children in the U.S. Last year, close to 270,000 Chinese students came to the US to study to study.
Chinese Buyers Palos Verdes Homes
Liu is an excellent example of this type of homebuyer as well as how they work and what they desire. He has always dreamed about living in the U.S., and that includes sending his children to study in America. In about two months, after he has obtained green cards for everyone, he plans to move his family to Palos Verdes Estates, California. Because he has never been to the U.S., he needs information and guidance on Palos Verdes and homes there. In September, he contacted our team to obtain information about properties in Palos Verdes and discuss his requirements.
Liu has seen the environment deteriorating, and he has concerns about the Chinese education system for his young children. His 8-year-old daughter is in the third grade in a Chinese primary school now, and she will continue her elementary schooling in Palos Verdes. His primary requirement is that the house is in an excellent school district. He was shown how he can use George’s proprietary “Spatial Match” Lifestyle home finder to locate homes within 0.5 miles of elementary schools. His son is 3 years old now, and in a few years, he, too, will need a stellar elementary school.
Liu’s initial budget was around $2,000,000, but when he learned more about the general real estate market from the real estate trend report provided him, he was surprised by his findings. He learned the average and median home price in Palos Verdes is cheap compared to other cities, and he will be able to buy a home in Orlando for about $1,500,000 – $1,700,000 that’s close to a good elementary school.
The second-most-important requirement for Liu is that the home can be easily sold again in the future, just in case he wants to move to another city in U.S. — and preferably a property with a small number of rooms because he believes smaller homes are easier to sell.
Liu was put in contact with George Fotion; he is one of our member agents in Southern California. Truly connecting with the client, understanding his top requirements — an excellent public school and the budget — agent George recommended three schools, and he passed the schools’ information along to Liu.
To give Mr. Liu more details about houses in the area, we held a three-party conference call, in which Liu, George and our team exchanged ideas directly. With a clear understanding of the client’s needs and advanced preparation, George provided more information on these schools as well as the nearby properties. On the call, Liu was also informed that properties with four bedrooms are easier to resell than one- or two-bedroom properties in the U.S. because many Americans have two or more children rather than the one child most Chinese families have. Liu felt the conversation was informative.
George then sent him listings are appropriate for him after the conference call. Now, Mr. Liu is keen to visit Palos Verdes in February and looking forward to having George show him properties.
This is just one example, and there are many variations. Many potential Chinese buyers have dozens of questions that need to be answered long before they consider flying to the U.S. and buying a home.
Now, let’s not lose perspective here; as important as it is for me to do my duty for my sellers of Palos Verdes homes to reach out to this market, this segment of the market is not as powerful as it once was. According to a newly released CAR study “International buyers are accounting for the smallest share of California home sales in 8 years as prices continue to rise and foreign investors slow buying”. The share of international buyers peaked at 8% in 2013, but is now down to less than 4% (as of November 2015) Buyers from mainland China, Hong Kong and Taiwan made up 43% of international purchases in California this year, followed by 8% each from Mexico and South Korea. According to Leslie Appleton-Young, chief economist for the CAR, “Chinese purchasers may be slowing because it is difficult to move money abroad”. It may also be due to the collapse of the Chinese stock market. The Shanghai Composite Index which peaked June 12, has fallen almost 40% from its high and the country’s currency was devalued against the US dollar in August. China has limited individuals to spending no more than $50,000 overseas and the central government has ramped up anti-corruption campaigns amidst the slowing economy that has seen turmoil in recent months. Across the U.S., buyers from China, Hong Kong and Taiwan spent an estimated $28.6 billion on homes in the 12 months through March, more than double the $11.2 billion spent by No. 2 Canada. The findings are based on a survey conducted in June of about 1,000 real estate agents. Since 2008, the first year agents were surveyed on the subject, results have shown foreigners representing at least 5 percent of transactions.
I’ve written other blog articles on the Chinese Buyers Palos Verdes homes market which you can find here:
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