Chinese investors buy $6.1 Billion worth Of U.S. homes in past 12 months

[Kaido]

In light of the $129 Billion US-Chinese trade war going on:

• Chinese Investors Buy $6.1 Billion Worth Of US Homes In Past 12 Months

"The National Association of Realtors (NAR) reported that international buyers combined to purchase $59 billion worth of U.S. residential properties between April 2021 and March 2022, up 8.5% from the same period one year earlier. Chinese Investors accounted for $6.1 billion dollars in home purchases, totaling over 10% of the market.

The homes being secured by foreign investors aren’t cheap, with average purchase prices hovering near $600,000 per home and median purchase prices approaching $370,000 — the highest ever recorded by NAR. Chinese investors had the highest average purchase price at just over $1 million per home.

Location tells a story as well. Chinese investors purchased nearly a third (31%) of their homes in California. This is a slight disparity from international buyers as a whole, who found the following states the most attractive (in order): Florida, California, Texas, Arizona, New York and North Carolina."

• The Chinese buy the most US real estate 10 years in a row

"NAR said the Chinese have been the largest group of foreign nationals buying homes in the US since 2013. Over the past 10 years, Chinese investors have bought a total of $188.6 billion worth of real estate."

This is coming on the heels of the iBuying market takeover (institutional house flippers), including Zillow's crash of their Offers division ($304 million loss in Q3 2021, with thousands of unsold homes). This is at a time when:

• The average selling price of a home is $456,800
• Medium rent is above $2,000
• Average rent in Manhattan Is now $5,000

And on a tangent, the current state of the car market:

• The average new car price is $48,000
• The average monthly car payment is above $700
• People are paying an average of $10,000 more for used cars

Big-picture-wise, the foreign Chinese investment of $6.1 billion total divided by a medium purchase price of $370k is about 16,487 homes, out of 142 million homes total in America, and Zillow had less than 10k homes purchase & 10k on order, so really, it's just a drop in the bucket, but that headline was pretty eye-watering!

 

[vi edit]

Those averages are a lot of things...unsustainable is one of them. Average new car is 48k??? Average payment is $700??? Wow.

 

[Leeea]

Average new car is 48k??? Average payment is $700??? Wow.

How is that unsustainable?

 

[Thump553]

Real estate investment has been a huge portion of individual investment in China for years. They have a huge real estate bubble that is in the process of collapsing, bringing down many banks and even regional governments. There are hundreds of vacant buildings in China built solely to drive "investment." Do a search on youtube, there are many many videos on their real estate bubble/banking crisis.

It doesn't surprise me in the least that the more sophisticated Chinese investors are dumping their money in the US realty market. These are the ones smart (or lucky) enough to get out before their bubble collapsed. Personally I think buying here now is buying at the peak of the market (beyond the peak in many areas).

 

[Homerboy]

How is that unsustainable?

Because wages are not increasing at the same rate as goods and services.

 

[Homerboy]

Those averages are a lot of things...unsustainable is one of them. Average new car is 48k??? Average payment is $700??? Wow.

I have one car from 2017 and another from 2007. The 2007 has lots of "issues" (cracked windshield, AC is dead, other things here and there...) I don't care. Both are paid in full, drive perfectly fine, and I can not fathom picking up a $700/month (or even $400) payment just to have a new car. I don't care. it works. And anything else is just not in my budget

 

[eelw]

Canada has cracked down on foreign purchases that are only used as tax shelters. Charged 20+% to any non resident home purchases and vacancy tax if confirmed they aren’t living here. Helped curtail somewhat the problem

 

[UNCjigga]

Canada has cracked down on foreign purchases that are only used as tax shelters. Charged 20+% to any non resident home purchases and vacancy tax if confirmed they aren’t living here. Helped curtail somewhat the problem

The fact that no politicians are screaming about this tells you it isn’t a bug, but a feature. Real estate lobby doesn’t care—they’ve been making bank.

 

[Kaido]

Those averages are a lot of things...unsustainable is one of them. Average new car is 48k??? Average payment is $700??? Wow.

In 2022, the average salary in America is $53,490. Compare that to:

• Average home price of $456,800
• Medium rent of $2,000/mo
• Average monthly car payment at $700/mo

The average inflation rate is 9.1% as of last month. Dunno how long this can last!

 

[Kaido]

Real estate investment has been a huge portion of individual investment in China for years. They have a huge real estate bubble that is in the process of collapsing, bringing down many banks and even regional governments. There are hundreds of vacant buildings in China built solely to drive "investment." Do a search on youtube, there are many many videos on their real estate bubble/banking crisis.

It doesn't surprise me in the least that the more sophisticated Chinese investors are dumping their money in the US realty market. These are the ones smart (or lucky) enough to get out before their bubble collapsed. Personally I think buying here now is buying at the peak of the market (beyond the peak in many areas).

I've seen a few Youtube documentaries on this. Here's a super-short one. Crazy stuff:

 

[Kaido]

Real estate investment has been a huge portion of individual investment in China for years. They have a huge real estate bubble that is in the process of collapsing, bringing down many banks and even regional governments. There are hundreds of vacant buildings in China built solely to drive "investment." Do a search on youtube, there are many many videos on their real estate bubble/banking crisis.

It doesn't surprise me in the least that the more sophisticated Chinese investors are dumping their money in the US realty market. These are the ones smart (or lucky) enough to get out before their bubble collapsed. Personally I think buying here now is buying at the peak of the market (beyond the peak in many areas).

That's really it...it's available & it's a good investment:

https://www.yahoo.com/video/us-housing-market-still-very-093000751.html

 

[Kaido]

How is that unsustainable?

Median rent = $2k
Average new car payment = $700
= $2,700/mo

Average salary in America is $53,490, which means about $3,207/mo after taxes (see screenshot below), minus $2,700 a month for house/car payments:
= $507/mo leftover for food, gas, insurance, etc.

Obviously, there are a zillion factors here: can you rent with roommates to split the cost? Can your partner work? Can you buy a used car? (currently +$10k over average, however) Can you move to a cheaper area & WFH to save on fuel & housing costs?

Even so, June 2022 was at a 9.1% inflation rate in America. 68% of American households said their savings could only cover a $400 emergency in 2021. Average gas prices are $4.30+ right now. The average phone bill is $114 per month.

 

[repoman0]

Mixing medians and averages and using it to make any conclusions makes me sad

 

[nakedfrog]

I feel like this is a bad thing (Chinese investors buying up this much US real estate). Are they the ones coming in with offers $100-300k over asking price?

I have one car from 2017 and another from 2007. The 2007 has lots of "issues" (cracked windshield, AC is dead, other things here and there...) I don't care. Both are paid in full, drive perfectly fine, and I can not fathom picking up a $700/month (or even $400) payment just to have a new car. I don't care. it works. And anything else is just not in my budget

Right there with you, it was tough to go for $310/mo on my dream car, even, I'd been enjoying not having a car payment for five years. I could afford $700/mo but I don't know how I would justify it to myself.

 

[Kaido]

Mixing medians and averages and using it to make any conclusions makes me sad

It's more of a headline shocker than anything really. Again, total Chinese housing purchases is most likely well under 17k homes out of 142 million homes in America, and probably far less than that, as many of those were $1 million dollar+ homes. Same thing with Zillow's crazy corporate buying spree...less than 20k homes total. Zillow says the total U.S. housing market is over $40 trillion total:

U.S. Housing Market has Doubled in Value since the Great Recession, Gaining $6.9 Trillion in 2021

The total value of private residential real estate in the U.S. grew by a record $6.9 trillion in 2021, to $43.4 trillion – more than double the level from a decade ago.

www.zillow.com

 

[dainthomas]

It's waaayyyy past time (like years) foreign ownership of real property in the US was restricted. Many other countries have been doing this for a while.

 

[Kaido]

I feel like this is a bad thing (Chinese investors buying up this much US real estate). Are they the ones coming in with offers $100-300k over asking price?

Right there with you, it was tough to go for $310/mo on my dream car, even, I'd been enjoying not having a car payment for five years. I could afford $700/mo but I don't know how I would justify it to myself.

iirc Zillow was going as high as $65k over asking price in some areas, but that plan crashed & burned because "buy high, sell low" apparently doesn't work in the long-term lol.

As far as cars go, even the budget econo-box Kia Soul now starts at $19,790, which is at least $330/mo (at 0% interest & no taxes haha).

 

[Pens1566]

I'm old enough to remember when the big concern was the Japanese buying up all the west coast property they could.

I'd still like to see something put in place to deter this type of activity no matter how large the volume is.

 

[nakedfrog]

iirc Zillow was going as high as $65k over asking price in some areas, but that plan crashed & burned because "buy high, sell low" apparently doesn't work in the long-term lol.

As far as cars go, even the budget econo-box Kia Soul now starts at $19,790, which is at least $330/mo (at 0% interest & no taxes haha).

Wow, I only bought mine 2 years ago, too. Not new, but only $2k less than that.
The Nissan Versa base price is still a touch under $16k though.

 

[Kaido]

It's waaayyyy past time (like years) foreign ownership of real property in the US was restricted. Many other countries have been doing this for a while.

We should have done this years ago with exporting manufacturing out of America as well! Not to mention capping the price of education:

Average Cost of a Master's Degree Data (Updated 2023)

erudera.com

The average cost of a Master’s degree for in-state students is $21,412 per YEAR!

 

[IronWing]

(Some) Americans made a crap ton of money selling overpriced real estate to Japanese investors in the 80s, to investment bankers in the 2000s, and the Chinese now. The bubble will pop again. Rinse , repeat.

 

[Homerboy]

I feel like this is a bad thing (Chinese investors buying up this much US real estate). Are they the ones coming in with offers $100-300k over asking price?

Right there with you, it was tough to go for $310/mo on my dream car, even, I'd been enjoying not having a car payment for five years. I could afford $700/mo but I don't know how I would justify it to myself.

I will drive any car I have until it's on fire and in a ditch. I will then rip the VIN number off and run away.
I just don't even "want" a brand new car. And I sure as shit do not want to dole out $500+ per month for a "cheap" used car. Just a colossal waste of money in my opinion.

 

[Aikouka]

I will drive any car I have until it's on fire and in a ditch. I will then rip the VIN number off and run away.

I just don't even "want" a brand new car. And I sure as shit do not want to dole out $500+ per month for a "cheap" used car. Just a colossal waste of money in my opinion.

Over the past few years, I've certainly grown more to understanding how you feel here, and agreeing with a lot of it. The idea of being tired of assuming the role of "the good little consumer" that happily takes out a loan or lease to keep the auto manufacturers happy. Ultimately, I'm tired of having car payments. My main thing about a car is that it needs to get me from A to B while being reliable. Although, the one caveat is that I like music while I drive, and it's nice for the car to be able to keep up with modern technology in regard to how we interact with music. ...or I could be that guy with the tape adapter that hooks up to their iPod. Anyway, the awkward part is that my older cars were still built in such a way that you could just replace the (double-DIN) radio with something new without losing features, but these days, the infotainment system is mixed with some controls to where the infotainment system might also provide things like the seat heater, etc. So, it's more like I've made it harder on myself to upgrade without upgrading the entire car.

 

[ch33zw1z]

This can’t be right, I heard from a reliable source Americans are flush with stimulus cash

 

[nakedfrog]

Over the past few years, I've certainly grown more to understanding how you feel here, and agreeing with a lot of it. The idea of being tired of assuming the role of "the good little consumer" that happily takes out a loan or lease to keep the auto manufacturers happy. Ultimately, I'm tired of having car payments. My main thing about a car is that it needs to get me from A to B while being reliable. Although, the one caveat is that I like music while I drive, and it's nice for the car to be able to keep up with modern technology in regard to how we interact with music. ...or I could be that guy with the tape adapter that hooks up to their iPod. Anyway, the awkward part is that my older cars were still built in such a way that you could just replace the (double-DIN) radio with something new without losing features, but these days, the infotainment system is mixed with some controls to where the infotainment system might also provide things like the seat heater, etc. So, it's more like I've made it harder on myself to upgrade without upgrading the entire car.

Yes, that is one thing I'd like to do on my VW, upgrade the speakers and add a subwoofer, and if it were still simple I'd have already done it. The head unit itself is fine, the overall sound just isn't what I'd like it to be.

This can’t be right, I heard from a reliable source Americans are flush with stimulus cash

"Why, back in my day, do you know what you could buy with $1,400 dollars? At least two senators! If the people really want change, they need to pony up and buy a senator."