April 27, 2011

San Marino Home Prices Driven by Chinese Buyers?

Here's an interesting article by Alain Sherter of BNet:

The average price of a home in Vancouver has shot up 13 percent and now tops $780,000. Even as home prices fall in most major U.S. cities, housing in tony San Marino, Calif., has shrugged off the financial crisis to reach a record high last year. Demand for real estate in Melbourne and other Australian coastal cities is up.

The link? Well-heeled Chinese home buyers are increasingly shopping abroad, pushing up prices in real estate markets around the world. Evidence of the trend:

One factor driving Chinese home buyers to think globally — strict government restrictions on how much they can spend overseas. Reuters reports that Chinese citizens are barred from spending more than the equivalent of $50,000 worth of foreign currencies in a single year, although there are ways around the cap. They’re also barred from owning more than two properties at home, forcing real estate investors to consider foreign markets.

San Marino: Recession-proof

 San Marino Home For Sale

Vancouver’s natural splendor, good schools and large Asian-speaking community are a particular draw for wealthy Chinese. That has helped make the city the hottest real estate market in Canada, even as home resales around the country remain generally flat. Prices for an ordinary two-story house in the city are up 10 percent this year, to $1.1 million.

In Southern California’s San Gabriel Valley, meanwhile, small, upwardly mobile San Marino is the only affluent community in the region where housing prices haven’t fallen. That owes partly to Chinese investors and home buyers, local real estate agents say:

“If you go to mainland China and someone asks, ‘Where do you live?,’ San Marino represents that you are wealthy,” said YanYan Zhang, a real estate agent whose clients include overseas buyers looking for homes here.

The surge in Chinese customers hasn’t been lost on realtors. For instance, Los Angeles-based CB Richard Ellis (CBG) offers services specifically geared to helping Asian buyers shop for homes abroad. Agents in China are also setting up tours of foreign cities for Chinese investors keen to scout overseas real estate.

Take note, Federal Reserve

China’s global real estate binge obviously makes for a stark contrast to the plunging prices and tide of foreclosure sales here in the U.S. And some observers will interpret it as yet one more indication that China is set to surpass the U.S. as the world’s leading economic power, as the International Monetary Fund predicted this week.

But perhaps even more striking than this economic reversal of fortune is how much more aggressive Chinese financial authorities have been in trying to puncture their housing bubble than the Federal Reserve was in the years leading up to the financial crisis.

Beijing vs. the housing bubble

China has the benefit of witnessing the carnage in the U.S., of course. But there’s no questioning how aggressively Beijing has moved to rein in its galloping real estate market, where prices have risen upwards of 50 percent since 2009. Its central bank has raised interest rates four times since last fall, while in January the required down payment on second homes was increased to 60 percent. Some cities also are raising property taxes. Meanwhile, China is taking precautions for when the bubble pops, including repeatedly lifting banks’ reserve requirements in recent months.

Despite these measures, there’s no guarantee that China’s landing will be a soft one. Some market analysts foresee an increase in bad loans, and the credit rating agency Fitch puts the odds of a full-blown banking crisis in China at better than 50-50. The kind of political unrest sweeping the Middle East also could flare in the People’s Republic, where economic empowerment may eventually prove incompatible with dictatorship.

As a result, it’s uncertain how long the real estate booms in Vancouver, San Marino and other cities fueled by the influx of Chinese buyers will last. Inflation these days — and financial bubbles — travel as comfortably from East to West as in the other direction. As China will learn, home prices don’t always go up.

READ MORE:  San Marino City Guide

It's similar to the LA Times article we highlighted earlier in the year.  As I hold Open Houses in San Marino and market my home listings, there are many Chinese buyers going through homes that are here for just a few weeks with the intent of finding a property to purchase.  Most home purchases are cash or with heavy down payments.

As Alain points out, San Marino is considered a very prestigious location for many Chinese nationals to own a home in.  Many have summer homes in San Marino that they use for a few months of the year.

Also, San Marino is driven by the fantastic public school district which is rated as #1 in California, year after year, based on the academic API scores.

Interested in seeing San Marino real estate homes for sale?  

 


Irina is a Top Realtor and the founder and President of Pasadena Views Real Estate Team™. She is available to assist you in all of your Real Estate transactions. Email or call her today at (626)629-8439.

Are you relocating to Pasadena?  If so, take a look at our 365 Things To Do In Pasadena® .  Call us at 626-629-8439 to schedule a time for your free home buyer or home seller consultation!

Read More:  Most expensive homes in Pasadena

Interested in more information about Pasadena and surrounding cities, check out our City Guides below:

Alhambra City Guide

Altadena City Guide

Arcadia City Guide

Monterey Hills City Guide

Pasadena City Guide

San Gabriel City Guide

San Marino City Guide

Sierra Madre City Guide

South Pasadena City Guide
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Thinking of selling your San Marino home? Interested in finding out the current market value of your single family home, condo or investment property? Then call Irina Netchaev at (626) 629-8439 to discuss what is happening in today’s San Marino Real Estate Market.

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