In the last ten years, many Chinese have been coming to the US and spending cash on real estate. According to RealtyTrac, the number of all-cash sales by Chinese real estate buyers has tripled since 2005.
RealtyTrac is an Irvine, California based realty research company and they conducted an analysis of housing sales alongside Ethnic Technologies, a New Jersey-based multicultural marketing company.
The results were determined by software that can determine ethnicity and language preference based on first name, last name, and address of the record, according to Ethnic Technologies.
This analysis shows that 46 percent of Mandarin Chinese-speaking buyers who purchased homes in the 17 months ending in May 2015 paid all-cash.
In 2005, just 14 percent of Mandarin Chinese-speaking home buyers used all cash. This means the number of Chinese using only cash to purchase real estate increased by 229 percent- the most of any other language group.
Cash buyers across the board are playing a much bigger role in the housing market now than they were 10 years ago, and that is particularly true for Chinese Mandarin-speaking cash buyers, who are more likely to be foreign nationals,” said Daren Blomquist, vice-president at RealtyTrac, in a release accompanying the analysis on Oct 6.
What are the implications of all-cash buyers? According to Blomquist, sales with foreign cash buyers like these have positive effects in the short term because of current and continued economic instability globally.
“But those markets are also more susceptible to a downside in the longer term when demand from foreign cash buyers dries up,” he added.
Either way, Chinese buyers are important to the US real estate market. They make up one third of international buyers, and Chinese real estate buyers spent $22 billion on US housing in the 12 months through March 2014 – 72 percent more than a year earlier, according to the National Association of Realtors, buying mostly high-end, expensive homes with a median price of more than $500,000.
With all-cash purchases becoming more common, these transactions positively affect our real estate market.
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