As a Bellevue Realtor, living in downtown Bellevue, I can personally attest to the story below. 🙂
By ROBERT FRANKSEPT. 20, 2014
Todd Lozier, left, and Bangze Wang of Lochwood-Lozier Custom Homes. They are at the site of an 8,000-square-foot home they are building in Medina, Wash., east of Seattle, for a Chinese investor. CreditStuart Isett for The New York Times.
As wealthy Chinese stash more of their fortunes overseas, they’re bidding up the value of everything from Bitcoins and Burgundy to Picassos and pink diamonds.
And, increasingly, China’s rich are also offshoring their families along with their cash. That’s created a real estate boom in an unlikely corner of the United States: suburban Seattle.
Wealthy Chinese have become far and away the biggest foreign buyers of real estate in Seattle in recent years, accounting for up to one-third of $1-million-plus homes sold in certain areas, brokers say. Seattle real estate agents are hiring Mandarin speakers and even opening offices in Beijing. Builders are designing much of their new construction for Chinese buyers.
Seattle real estate agents have even added a new term of art to their deal language: “the feng shui contingency.” Before closing on a house, many Chinese buyers are asking to have a feng shui master or consultant approve the house as part of a general inspection. Bad feng shui means no deal. Or, sometimes, some last-minute landscaping.
“We had a case where a tree was blocking the chi, or energy flow, of the home,” said May Wan, an agent at Berkshire Hathaway Home Services in Bellevue who works with many Chinese buyers. “So it had to be taken out. They planted another one nearby.”
The business of relocating China’s uprooted rich is likely to grow in the coming years. A quarter of all real estate sold to foreigners in the United States last year went to Chinese buyers. Now the largest group of foreign buyers in the United States, the Chinese spent $22 billion on American real estate in the 12 months ended in March, according to the National Association of Realtors. That’s up 72 percent from the year-earlier period.
They lean toward luxury: The median purchase for Chinese buyers is $523,148 — nearly twice the national average. Three-quarters of their purchases are all cash.
That’s made Seattle one of the world’s top catch basins for the billions of dollars spilling out of China every year. While foreign money has also been pouring into New York, Los Angeles and London real estate, the impact of the Chinese rich on Seattle is far more concentrated, focused on a few small, upscale suburbs. They’re especially attracted to Medina — home to Bill Gates and Jeff Bezos — and the West Bellevue area. “The first question you often hear from Chinese clients is ‘Where does Bill Gates live?’ “ said Moya Skillman, a broker with Windermere Real Estate.
Brokers and analysts say 20 to 40 percent of $1 million-plus homes sold on the Eastside — a collective term for eastern suburbs of Seattle — were purchased by Chinese buyers.
A $1.1 million listing in West Bellevue recently attracted 24 bidders, virtually all of them Chinese, and the home quickly sold for $1.4 million. Ms. Wan said a $2.5 million lakefront property recently sold with three offers, just days after coming onto the market. The median sales price in Bellevue is up 82 percent since 2011, to $1.37 million, according to sales data.
The boom may be just starting. A survey by the Hurun Report, a China-based wealth research firm, found that 64 percent of China’s millionaires have emigrated or plan to emigrate in coming years. They listed their favorite destination as the United States, followed by Canada and Australia. While respondents cited better education, air quality and food safety as their main reasons, concerns about political and social stability have also caused the wealthy to secure more of their fortunes overseas, according to advisers to wealthy Chinese families. Chinese residents held an estimated $659 billion offshore in 2013. The number is expected to surge to $1.9 trillion by 2018, according to the Boston Consulting Group.
Their attraction to Seattle stems from its top schools, clean air, longtime Chinese population and, more recently, a hit movie. The 2013 film “Beijing Meets Seattle” (or“Finding Mr. Right” in English) became one of China’s top-grossing films of all time, telling the story of a pregnant woman who flies to Seattle to find true love and American citizenship for her baby. The film struck a chord with younger Chinese, who saw Seattle as a liberating, romantic escape from the intense materialism of China (even though much of the movie was filmed in Vancouver).
“People my age in China suddenly started talking about Seattle,” said Bangze Wang, a Beijing native who now lives in Seattle.
Mr. Wang, known as James, embodies the new Seattle-China attraction. The son of a successful developer in Beijing, he arrived in Seattle in 2008 with plans to attend the University of Washington and return home to the family business. After graduation, however, he was offered a job at Lochwood-Lozier Custom Homes, one of Seattle’s top builders. Now he’s a project manager, negotiator and all-around cultural liaison between the company and wealthy Chinese buyers.
“Seattle was a better opportunity for me than China right now,” Mr. Wang said. “A lot of Chinese families are planning to move here.”
Lochwood-Lozier used to sell its high-end homes to Microsoft millionaires and other local executives. Now it is building 10 new homes aimed mainly at Chinese buyers, with prices of $2.5 million to $5 million.
Todd Lozier, the firm’s president, said Chinese buyers prefer big, modern homes with two kitchens — a small, vented one and a larger display kitchen — along with grand entrances and rooms for extended family. “They like curb appeal,” he said.
They also like a classic American look, feng shui notwithstanding. Ms. Skillman was showing one Chinese buyer a home with Chinese antiques on display “and the buyer almost walked out,” she said. Now she tells sellers to clear out most Chinese collectibles or artworks before they list.
David Masin, president of Masins Fine Furnishings & Interior Design in Bellevue, said business from wealthy Chinese was up more than 50 percent this year. One Chinese family, he said, recently bought a $24,000 Thomas Pheasant dining table, which they said was for their son, who’s in college. Another customer bought a multimillion-dollar house and asked Masins to furnish it, sight unseen. The cost: around $250,000.
ROBERT FRANK is CNBC wealth editor and the author of “Richistan” (and no relation to Robert H. Frank, the economist and contributor to Economic View).