Although the Bay Area has always attracted foreign home buyers, anecdotal evidence suggests that their numbers are growing, creating even more competition in areas where demand has far outstripped the supply of new homes. The boom is partly because of globalization, but mostly a result of the tremendous buildup of wealth in developing countries, especially China, which had 2.4 million millionaires in 2013, up 60 percent from the year before, according to the Boston Consulting Group.
Many of these millionaires want to diversify their assets outside of what is still a communist country, send their kids to U.S. schools or have a place to escape if China’s smog gets even worse. Buyers from China are reluctant to talk about their purchases publicly, but real estate agents say they prefer new or nearly new homes or condos in good school districts with great views (don’t we all).
Canadians purchased the largest number of homes (19 percent), but China accounted for the largest dollar volume of international sales (24 percent). In California, 62 percent of foreign buyers came from Asia, whereas in Texas, 59 percent came from Latin America.
“In very, very specific places, (foreign buyers) are important, but in the overall scheme of things they are not,” said Richard Green, director of the University of Southern California Lusk Center for Real Estate. In Southern California, hot spots include Irvine, the Los Angeles County cities of San Marino and Arcadia, and “the San Gabriel Valley in general,” Green said.
Across the Bay Area, “the percentage of foreign buyers is probably 15 percent, and Chinese is probably half of that,” said Mark McLaughlin, chief executive of Pacific Union. “If you go to Palo Alto, north of 25 percent (of buyers) are Chinese. In San Francisco, it’s 15 to 20 percent Chinese. In Marin, it’s probably 3 percent. In Sonoma, it might be zero.” Berkeley gets some foreign buyers because of the University of California.