MEDINA, Wash. – Savvy Seattle-area real estate agents have gained an advantage by paying attention to the growing connections between China and Washington state.
“I’m so glad my mother made me study Chinese,” laughed property broker Janie Lee, after showing a client from Beijing a $4 million home in the suburb of Medina. “I’ve been using it a lot.”
This year, Chinese visitors are on pace to top the list of international travellers to the Evergreen State. More than half of the 7,300 international students at the University of Washington are from the People’s Republic. And a recent top-grossing Chinese romantic comedy featured a Beijing woman who finds love in Seattle.
The influx has made its way to high-end property markets, and observers don’t expect it to slow down any time soon. “This is just the beginning from just a few years ago. So in a few years there will be even more,” Lee said, interpreting for her prospective buyer, Hongbin Wei.
In anticipation, some Seattle-area homes are being built or remodeled to improve their feng shui, but other factors can help make a property attractive.
As Wei considered the Medina mansion, Lee asked the seller whether all five bedrooms had their own bathrooms. “Most of the buyers, the Asian buyers, like private suites for their parents or extended family,” she said.
Behind their growing economy, wealthy Chinese homebuyers have poured into the U.S., spending $22 billion on property in the states, tops among all foreign purchasers over the 12 months preceding a March study from the National Association of Realtors. That was up from $12.8 billion the previous year, when Chinese buyers also took the No. 1 spot. The homes had a median price of more than $500,000, which again trumped other international clients.
Washington state received a hefty share of attention, ranking second only to California in sales to Chinese buyers.
“We’re at the very beginning of the Chinese outbound investment cycle. It’s the tip of the iceberg,” said Simon Henry, co-CEO of Juwai.com, an influential real estate website that connects Chinese buyers with international properties.
The China-Washington ties include direct flights between Seattle, Beijing, Hong Kong and several other Chinese cities, and that proximity is part of what makes the West Coast attractive, said Jed Smith, a research director with the Realtors group. Other foreign investors follow similar patterns, he said, noting that Mexican buyers often purchase in the Southwest, while Europeans tend to favour the Northeast.
Nationally, Smith said, foreign buyers spent about $90 billion on U.S. property last year, out of about $1.3 trillion in total sales. The international impact had potential to raise spot prices, but not enough to inflate costs across the U.S. or crowd out local buyers, he said.
The recent links — including the film “Bei Jing Yu Shang Xi Ya Tu,” which Lee says literally translates to “Beijing Meets Seattle” and references the Tom Hanks, Meg Ryan classic “Sleepless in Seattle” — come as other major U.S. cities, including New York, San Francisco and Las Vegas, have experienced a tourism boost from the Far East.
Chinese tourists have been among the fastest-growing and highest-spending U.S. visitors in recent years. In 2013, about 1.8 million Chinese travellers came to the U.S., contributing about $21 billion to the economy, according to a White House release.
State Department figures show Chinese tourists spent about $7,000 per person in the U.S., compared with the average of $4,500 for all overseas visitors.
To encourage such travel and spending, the U.S. government last month expanded the availability of visas to Chinese visitors. In announcing the change, the White House said it could bring an economic impact of $85 billion by 2021.
In Washington, Visit Seattle, a travel industry group, says more than 100,000 Chinese travellers will visit the state this year, tops among all overseas travellers to the state.
Education has been part of that draw, and veteran Seattle-area real estate agent Tere Foster said it’s been common for Chinese parents to buy homes for their children while they attend school, often rooming with other students.
Foster has sold homes in ritzy Seattle suburbs for three decades and has seen foreign buying booms before. She said the cycles depend on whose economy was humming at the time. In years past, she’s had spikes of Japanese, Korean and Eastern European clients.
Part of the reason for the current increase of Chinese buyers is investment. “Chinese currency it’s still a soft currency,” which is subject to rapid value fluctuations, said Jonathan Zhang, who teaches business at the University of Washington. Purchasing a home in the U.S. “is a good way to preserve wealth,” he added.
“When you have sudden prosperity, you get excited, you spend it,” Zhang said. “At the same time, you think about how you’re going to preserve it for the future, because it’s not that clear this boom is going to continue.”