China Influences Seattle Real Estate

Puget Sound Business Journal: Opinion: ​Why the Puget Sound region is attractive to Chinese home buyers

According to NAR, 39 percent of home sales to Chinese in 2014 and early 2015 were for primary residences, while another 7 percent were bought for children while they attend university in the U.S. According to Juwai.com, 80 percent of China’s affluent people have definite plans to send their children abroad to study.

The University of Washington is internationally ranked as No. 33 out of 100 by www.TimesHigherEducation.co.uk, one of many websites that cater to international students. The quality of school districts, especially on the Eastside, including Bellevue, Redmond, Kirkland and Issaquah, is another huge draw for Chinese buyers wanting to give their younger children the best education money can buy.

PSBJ: Seattle wealth managers say sputtering Chinese economy could boost Puget Sound investment

Why is China’s struggling economy good news for the Puget Sound region?

Miller: Right now, Seattle is benefiting because obviously China buys some of our products, like our apples, and if you look at asset flows, Seattle is a lot better than a lot of places in regards to China because of our (strong trade ties). And, if you look at all the Chinese buying condos and homes in Seattle right now, it’s a benefit. Chinese buyers are looking for a safe place to invest, and the benefit is it bumps up home prices. People will complain if you get outbid by a Chinese cash buyer, but the net effect is cash coming into the economy.

PSBJ: $2 billion and counting: Chinese shake up Puget Sound region's real estate market in a big way

In Washington state in 2013, people from China bought nearly $2 billion in residential real estate.

"As long as China is allowing Chinese people to invest outside of their country, I don't think it's going to stop," said Brian Hatcher, an executive vice president of commercial real estate services company Kidder Mathews.

Tere Foster, a residential broker with Windermere in Bellevue agrees.

Chinese see real estate as a strong investment, and Seattle is quickly becoming the preferred location on the West Coast among Asian buyers, said Foster. Chinese buyers are drawn to the Puget Sound area by the quality of schools and the relatively clean air and water. That theme has been repeated over and over in Seattle this year.

Interest among Chinese buyers in commercial real estate is also increasing. Earlier this year a Chinse group paid $30 million for the First Congregational Church's property in downtown Bellevue, where early plans call for a pair of 43-story residential towers. A different group bought a nearby high-rise development site for $31 million in 2013.

Kidder Mathews was involved in both of those sales, and Hatcher said the buyers paid all cash and closed in about 60 days. That's lightning quick for transactions of this size. Sometimes domestic buyers can take 18 months or longer to close because they want to know precisely what they can build and how much it'll cost to develop.

That story was from the end of 2014. Most recently: China's woes inject uncertainty into Seattle's real estate market

Seattle economist Matthew Gardner of Windermere Real Estate on Monday said that potentially the greatest impact will be that institutional investors from China will back away from buying assets, such as the 76-story Columbia Center, which sold this month for $711 million to a group of investors from Hong Kong. It depends on how much the devaluation of yuan impacts investors' purchasing power, and how those investors perceive the impact on their projected return on investment.

Real estate developer Kevin Daniels, who's using money from China to develop the Mark, a 43-story office/hotel tower under construction in downtown Seattle, anticipates an initial slowdown and then expects the flight of capital from China to the U.S. to accelerate.

He added that the China situation has had no impact on his development, as funds from overseas investors already have been invested in the U.S. He said Chinese investors "just made a great return already with the devaluation of the yuan."