LOS ANGELES— The wealthy around the world are always looking for ways to invest their money, and for some people that means buying homes in the United States. While foreign buyers make up just more than six percent of overall home sales in the United States, certain cities are disproportionately affected by foreign buyers, and that includes neighborhoods in southern California.
Skeptics may call the belief in feng shui a superstition, but many Chinese consider it an art, and essential for good luck and health in a home. When Chinese native Cathay Wicks searched for a home in the United States, she looked for feng shui elements.
She said she looks for a home that has a lot of light. She said it does not have to be big, but it needs to feel bright.
Wicks is a part of a growing number of people from overseas who are interested in buying homes in major U.S. cities.
Jed Kolko is chief economist for the real estate site Trulia.com. “There are some parts of the United States that see very strong foreign demand and that helps keep prices high in lots of areas. The places where we see this impact the most is in parts of Los Angeles, Miami and New York,” he said.
The number of buyers from China has been increasing, according to Los Angeles-based real estate expert Angela Wong. In the past year, her clients from China have increased by 30 percent.
She said the first reason her clients buy homes in the United States is so their children can attend school here. The second reason: to immigrate here just like Cathay Wicks, who bought a home in a Los Angeles suburb.
Wicks said the weather in Los Angeles is good, and it also is convenient because there are more Chinese here so it does not feel like a foreign country.
More than half of the buyers from China come to California.
In Irvine, California, a new housing development is attracting the attention of potential Chinese buyers with feng shui elements inside the homes and throughout the neighborhood. Developer Emile Haddad came up with the idea. “So we have done feng shui on everything we have. We also have a consultant who looked even at street names when we named the streets. We want to make sure the names of the streets are appropriate in terms of either superstition or in terms of simple pronunciation,” said Haddad.
It is not just people from China, however, who are buying homes in the United States. People from nearly 70 countries are investing their money in U.S. homes. Realtor Shannon Miller said most foreign buyers pay cash, making housing markets such as Los Angeles extremely competitive for domestic buyers who do not have the cash.
“Most of the buyers are trying to buy their homes the traditional way through a loan, and the cash buyers are coming in and they are beating them out. They appeared when the market was full of foreclosure properties. Now their interest is in everything,” said Miller.
One of the neighborhoods that interests foreign buyers is affluent Beverly Hills, where Stan Smith works as a broker. “We have seen different countries go through different economic cycles, and as they prosper they come here. They want to buy a trophy property. They want to put their money in a safe place.”
Another reason for buying a home in the United States: the EB-5 visa. It requires a foreigner to not only invest a certain amount of money in commercial enterprises here, but also have a U.S. home. Economists expect home prices to keep rising, so to make a profit they do not expect foreign investors to sell their homes anytime soon.