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Wealthy Chinese snap up prime Seattle real estate

By Sanjay Bhatt

The Seattle Times

POSTED:
LAST UPDATED: 09:45 a.m. HST, May 25, 2013


SEATTLE » Real-estate agent Joseph Ho climbed the gilded staircase of a Hunts Point, Wash., mansion listed for almost $5 million, shooting video on his Apple iPad tablet and narrating in Chinese.

Buyers from China have inquired about the 5,540-square-foot house. Ho made sure to capture a blue-sky fresco in the formal dining room — “It’ll remind them of Caesar’s Palace in Las Vegas” — and a yacht-ready dock.

“Water features are important for Chinese feng shui,” Ho said. “When you have 1.4 billion Chinese, many of whom are millionaires, somebody will like it.”

China’s super-rich, who have historically been drawn to San Francisco, Los Angeles and Vancouver, B.C., are investing in Seattle-area real estate in growing numbers, buying multimillion-dollar homes, rent-producing properties and land for commercial development.

In the process, they are accelerating the real-estate market’s recovery, sometimes edging out other buyers with all-cash offers, and deepening ties between Seattle and China.

While exact numbers are hard to obtain, Seattle-area real-estate agents, bankers and China experts say there’s been a definite increase in the past year of rich Chinese nationals shopping for homes.

Citi Private Bank, for instance, reports it’s seen about a 30 percent increase over the past 12 months in the volume of mortgages involving buyers from Asia in the Seattle area.

The buyers have several motives: Some want a safe place to invest and diversify their fortunes. Others want their children to start school or university studies here. And some want to launch businesses here.

There are at least a few who are buying property without setting foot on it.

“We’ve had several projects come in here where the person purchasing from China bought it without ever seeing the property,” said Robert Grumbach, who oversees development for the city of Medina, Wash., home to Microsoft Corp. Chairman Bill Gates. One of Ho’s clients in China bought a Hunts Point mansion last year for almost $7 million — and decided to tear it down to build a new home. The client, who thought he could get it built in three months, was shocked to learn it would take two to three years.

Though some may buy based on just a video, Ho says, it’s more common for the rich buyer from China to hop on a plane to Seattle as part of a U.S. tour.

The buyers have cash to spend and are eager to close a deal, said Ho, of Prudential Northwest Realty Associates in Bellevue, Wash.

“They want to negotiate, but if you don’t engage, they’re gone” to San Francisco; Malibu, Calif.; or other West Coast cities, he said.

While San Francisco has long been a destination for Chinese investors, tourists and students, Seattle’s star has been rising.

The Chinese began paying more attention after President Hu Jintao visited in 2006 as part of his first state visit to the United States, said Mark Wen, president of the Washington State China Chamber of Commerce.

Direct flight service starting in 2008 made traveling from China quicker.

And then former Washington Gov. Gary Locke, the first Chinese-American U.S. governor, became the first Chinese-American to serve as U.S. Commerce secretary in 2009. Locke became ambassador to China in 2011.

In addition, a recent Chinese romantic comedy, “Finding Mr. Right” — or titled “Beijing Meets Seattle” in Chinese — is giving Seattle a media splash in China.

“We’re not the end of the Earth anymore,” said Joe Borich, president of the Washington State China Relations Council.

Circumstances in China also are driving wealthy Chinese to look abroad.

“It’s only natural that they want to be part of a better environment — clean water, clean air, less density of people,” said attorney Leo Peng, who manages the Beijing office of law firm Garvey Schubert Barer.

Moreover, investment opportunities in China are limited. Some wealthy families also may want to protect their assets by stashing some abroad.

“This is pretty much identical to what happened to Vancouver (British Columbia) in 1997,” Wen said. That year, the British transferred control of capitalistic Hong Kong to communist China. “Vancouver became a haven for people moving money out of Hong Kong.”

Two other recent trends contributed to the current wave of superrich China buyers coming to the U.S.: The rise of China’s currency against the U.S. dollar and the run-up in China’s property values that made many millionaires, said Tom Chang, who oversees the Pacific Northwest for California-based East-West Bank, the largest Chinese-American bank in the United States.

In 2011, China had more than 1.4 million millionaires, ranking it third globally, and 648 households with more than $100 million in wealth, according to a study by Boston Consulting Group.

Some of these Chinese investors are obtaining investor visas from Canada and the United States that allow them to move their families here in exchange for investing in job-creating projects. In 2012, about 80 percent of such investor visas issued by the U.S. government were to Chinese nationals.

To be sure, buyers from around the globe are shopping for homes in the U.S. market: International sales totaled $82.5 billion in 2012, up from $66.4 billion in 2011 and $53.4 billion the year before that, according to the National Association of Realtors.

International buyers who want to buy homes in the U.S. market can have trouble getting loans from U.S. banks, experts say, because of cultural barriers and not having an established credit history here.

Complicating matters, China restricts individuals from taking more than $50,000 out of the country per year.

Citi Private Bank has helped Asian clients buy real estate in their own name or through a foreign corporation or through a trust, said Ida Liu, who oversees the Asian Clients Group in North America.

“Our team in Asia can underwrite the mortgage for a house in the U.S.,” she said. “It’s really seamless.”

Peng, who lived in Seattle and now practices law in Beijing, said some of the affluent Chinese nationals buying houses in the U.S. made their money in real estate and intend to develop apartments, offices and shopping malls here.

“This is just the beginning of a huge wave of investment,” he said.

“We’ve had several projects come in here where the person purchasing from China bought it without ever seeing the property.”We’ve had several projects come in here where the person purchasing from China bought it without ever seeing the property.”

Seattle Times computer-assisted reporting specialist Justin Mayo contributed to this report.






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Wazdat wrote:
USA is CRAZY to sell out residential real estate to Foreigners. You CAN'T go to China and buy homes, now can you ? NO
on May 25,2013 | 01:03AM
Nevadan wrote:
Yes, many Americans own homes in China. Most countries, including Canada and Australia, welcome foreigners buying homes. It means jobs! It is the economy, stupid !
on May 25,2013 | 05:40AM
Rapanui00 wrote:
Who would want to own a home in a country where human right abuses are a every day issue...Not to mention a military threat to the US. The Chinese are also "strip mining" the planet of valuable resources. Americans are just plain stupid to let this go on in front of them -
on May 25,2013 | 05:58AM
Nevadan wrote:
Thanks for your comment. Obviously to the American homeowners in China, that is not an overriding issue. Now consider the opposite: Chinese homeowners in the U S: It is a critical demographic issue. Fifty years ago, we have five workers supporting one retiree. Because people are living longer, in 5 years two workers will support one retiree. One solution will be to bring in workers from foreign countries. Is it better to legalize an illegal alien, or to bring in multi-millionaires? The former earns little and pay little or no taxes. By definition, they will be "takers" rather than givers. The latter will pay much more taxes. They are welcomed in most countries.
on May 25,2013 | 06:24AM
allie wrote:
most of us cannot afford a home in China or the USA. Our generation is really in trouble and we know it.
on May 25,2013 | 07:59AM
tiki886 wrote:
The IRS statistics show that most of the population were born "poor" because mom and dad were paying our bills. The "poor" in the US has always been 15% and has remained steady since the 60s so all those trillions of welfare dollars have done nothing to reduce that 15%.

And allie, if in the next 20 years you are not in the the 26% to 39% tax bracket, your UH degree was worthless.


on May 25,2013 | 08:57AM
niimi wrote:
Las Vegas has homes for under $100,000. 10% down loans are abound. California City, Calif. Stockton, Calif. Go to the Midwest and there are tons of areas where homes are below $200,000. Not everyone can live in Hawaii, the Bay Area or Manhattan.
on May 25,2013 | 09:16AM
Nevadan wrote:
Las Vegas = ninth island of Hawaii
on May 25,2013 | 04:36PM
HD36 wrote:
We're not setting a good example; we've had slavery, a civil war, IRS targeting, bugging reporters, and the largest experiment in socialism from 2008. ie TARP, TBTF QE3...
on May 25,2013 | 08:48AM
Pookie_Baby wrote:
Wrong. Well........ I guess someone can own the home, but you can't own the land. Belongs to the republic. And by the way, not to smart calling people stupid.
on May 25,2013 | 06:57AM
nodaddynotthebelt wrote:
I agree. And you can actually see this going on in your backyard in the form of foreigners buying prime real estate in Hawaii. Many rich Japanese and other foreigners own home in such prime real estate areas as Kahala and Hawaii Kai. Many do not even live in their homes here. They live there part time. Some even live in their posh homes for only a couple weeks of the year. All this while many US citizens can barely get by renting an apartment. This is simply wrong. Further, I would wonder how much of a luxury tax these rich foreigners are paying for their land and homes. Given how we give tax breaks to US multimillionaires, such as a two hundred dollar property tax while a senior citizen has to cough up two thousand on a fixed income, I would not be surprised at how much these foreigners get to skate by. These luxury properties should be taxed much higher when owned by foreigners. Obviously it is so cheap that we have lots of them owning homes in prime areas.
on May 25,2013 | 08:51AM
niimi wrote:
And we thought the Japanese would own America 25 years ago and look at what actually happened. We even had a book and a movie titled, Rising Sun. The Japanese are still reeling. China is so overbuilt now that their bubble is scary. This is a false alarm, folks. I'm more worried about the Chinese crash.
on May 25,2013 | 09:10AM
false wrote:
YES, You should do a little investigating before making such stupid remarks. Yes, Americans can and do own homes (under their own names) in China and also in Japan.
on May 25,2013 | 02:17PM
Pookie_Baby wrote:
who gives a s*#t false.
on May 25,2013 | 06:35PM
nitpikker wrote:
well, now the chinese are going to replace the japanese as the "evil foreign" investors.
on May 25,2013 | 02:41AM
kraid808 wrote:
From what I understand, they won't be buying in Hawaii at the rate the Japanese did. Canada and Mainland US are perceived to be higher value than Hawaii. Hawaii lacks amenities that Mainland US has such as gambling, performing arts, pro sports, and nightlife options. Not to mention transportation and other infrastructure that are more plentiful and cheaper. So we'll see more real estate transactions there. The new condo developments in Hawaii are likely to be purchased by wealthier Japanese and West Coast US clients that want to be here part of the year or rent to the locals at higher prices.
on May 25,2013 | 07:51AM
allie wrote:
very true. Hawaii is banking on Chinese tourists and investors. But I hear, in Waikiki, that the Chinese are bored with Hawaii,, our history and the culture here. Many Chinese are saying, "Too third world...too boring. Nothing going on."
on May 25,2013 | 08:01AM
Rapanui00 wrote:
If thats true its great news - I for one will not be welcoming these people from one of the worst countries on the planet - next time you shop at Walmart and COSTCO (Chinese Overseas Trading Company) think about the effects your thirst for cheap junk translates too...Human Rights Abuse, Pollution, and lets not forget their potential Military Threat. Come on people you have to be smarter then this -
on May 25,2013 | 08:49AM
UhhDuhh wrote:
There. You said "our" history. Zing!!!
on May 25,2013 | 10:00AM
UhhDuhh wrote:
Zing? Zing Zing!! Albert or Alan- are you there?
on May 26,2013 | 10:11AM
niimi wrote:
No worries. Nothing is sutainable. The Chinese will have their hey day. Then someone else may come behind them. Maybe it will be Africa's time to rise next. Or India.
on May 25,2013 | 09:17AM
false wrote:
Hey, when is it going to be the Polynesian's turn?
on May 25,2013 | 02:39PM
Rapanui00 wrote:
China is a Communist country with a record of butchering their citizens. What a whore we are - quite incredible isnt it?
on May 25,2013 | 05:18AM
Rapanui00 wrote:
Since the last comment was censored - the Chinese have the worst human rights recored on the planet and are polluying the world not to mention their own country. Its quite insane that we pay hommage to these people all for the sake of the almighty dollar. Boycott China and their products now!
on May 25,2013 | 05:20AM
Pookie_Baby wrote:
Agree.
on May 25,2013 | 06:41AM
HD36 wrote:
Whaterya gonna do? eh; the US owest them trillions of dollars. Reckless spending by the governent meant trillions of borrowing from the Chinese. Default on the debt, and we'll have a major run on bonds and lose the status of the world's reserve currency, which we'll probably lose at some time anyway. Keep buying $85 billion dollars in bonds, the Chinese slowly sell at the top, and convert the money into prime real estate and rent it back to us. When the Fed starts selling the bonds, the Chinese are out at the top with all the prime real estate in America. Nothing illegal about it. The government got themselve's in this mess by exponential deficit spending as far as the eye can see. The Chinese know they are sitting on a pile of trash, in bonds, and rather convert it to hard assets. Paper money, Fiat currency, is only as good as the government issuing it.
on May 25,2013 | 08:09AM
tiki886 wrote:
I guess you forgot that Hillary Clinton went begging on her knees to borrow more money from the Chinese government.
on May 25,2013 | 09:19AM
LanaUlulani wrote:
Some Chinese. Not all! What a racist statement !
on May 25,2013 | 01:27PM
Roosevelt wrote:
I don't recall reading similar comments in the early 2000's when Europeans were purchasing homes in Florida.
on May 25,2013 | 07:41AM
cojef wrote:
Apparently the Europeans have class that we don't have. After all our culture mimicked the European culture. About all we have assimilated from the East is the "sushi and chop suey". One is comfortable with something that is familiar and opposed to anything alien, until one gets enough exposure.
on May 25,2013 | 08:43AM
HD36 wrote:
I heard Chinese , Japanese, and other citizens who weren't white couldn't buy land in certain parts of Hawaii at one time? I recall the Tantulus area was not for sale to anyone who was non-white.
on May 25,2013 | 09:40AM
false wrote:
Not only in Hawaii but the entire U.S. at one time.
on May 25,2013 | 02:43PM
ready2go wrote:
They're also buying real estate in Honolulu. Condos and homes.
on May 25,2013 | 08:11AM
HD36 wrote:
Friend from Seattle is trying to buy a house but there's usually two bids in already.
on May 25,2013 | 08:43AM
niimi wrote:
And we thought the Japanese would own America 25 years ago and look at what actually happened. We even had a book and a movie titled, Rising Sun. The Japanese are still reeling. China is so overbuilt now that their bubble is scary. This is a false alarm, folks.
on May 25,2013 | 09:10AM
serious wrote:
niimi, correct. Ronald Reagan when told the Japanese were buying prime real estate in America including Rockefeller Center. He said--I'm happy they see value in the USA!!! Folks, everything works in cycles, the stock market, emotions, politics, tides--you name it--just wait it out!!!
on May 25,2013 | 11:01AM
niimi wrote:
I expect the 99 Ranch Market to boom over the next 10 years.
on May 25,2013 | 09:18AM
HD36 wrote:
The biggest buyer of single family homes and town houses is hedge funds.
on May 25,2013 | 09:47AM
HD36 wrote:
The biggest buyer of single family homes in the United States right now are hedge funds. Able to get funding via the repo market at less than the rest of us, they're buying up thousands of single family homes in formerly distressed areas like Arizona and Las Vegas and renting them out for a profit. The investors in the hedge fund are making more than leaving it in Treasury bonds.
on May 25,2013 | 09:46AM
mikethenovice wrote:
Reminds me of the 1980s when the Japanese were buying up property left and right in America due to their robust economic wealth effect back home before it imploded.
on May 25,2013 | 10:40AM
mikethenovice wrote:
With the Chinese economy doing very good, does that mean this lady was willing to over pay for those property?
on May 25,2013 | 10:41AM
mikethenovice wrote:
At the end, I hope this lady pays her property taxes, and finds ways to add value to the neighborhood by upkeeping the condition of it unlike what happened in Kahala with that Japanese billionaire.
on May 25,2013 | 10:44AM
LanaUlulani wrote:


Chinese pride! Do not blame Chinese people for their business acumen. Instead look to Obama's disastrous fiscal policies which are further devaluing the American dollar while China's currency gains!


on May 25,2013 | 01:43PM
HD36 wrote:
That's a fact. If China let their currency float freely, it would appreciate over 400% against the dollar, like the Yen did back in the early 70's.
on May 25,2013 | 01:49PM
Hapa_Haole_Boy wrote:
Good, keep Chinese investors there and away from Hawaii.
on May 25,2013 | 05:18PM
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