Ranch style homes in Arcadia are still popular, but hundreds are now only memories in the city of 57,639 where homebuyers from China have transformed residential streets into clusters of mini-mansions. In 2014, about 150 older homes were torn down and replaced with mansions as noted in a Bloomberg.com report. Homes of several thousand square feet were built on lots that were almost as large as the land. In Irvine in the same year, 80% of new home construction was due to Chinese investments.
Expect the trend to continue, says real estate agent Fatima Malik who has a unique perspective from covering a large portion of Los Angeles County. “Chinese investors can look at the U.S. as a safe haven for their money and we’re cheap in the grand scheme of things.”
In 2015, the Chinese represented the largest group of overseas U.S. homebuyers in the according to a report in the New York Times, surpassing Canadians. The height of the buying spree may be passing, though. A report in the Wall Street Journal in late 2015 noted that Chinese homebuyers were beginning to pull back. Concerns are building inside China that the country’s subprime lending looks like the financial problems the U.S. had in 2008.
California, says Fatima, remains a viable option for investors from around the globe despite its challenges. Plenty of sunshine and a resort-like culture have an appeal that stretches across the Pacific. “The Chinese can relate to investing in this environment as they have found their own economic success with the tourism industry.
“Los Angeles may be pricier when compared to much of the U.S., but for Chinese investors our residential and commercial prices have the potential for strong appreciation” she notes. “This will continue to be attractive while China’s currency is still strong. The U.S. is a safe haven for many and, if guided correctly, properties here represent a solid investment.”
Many Chinese homebuyers like to only work with Mandarin speaking real estate agents but Fatima, who has travelled to 17 countries and worked with clients from over 50 countries, is comfortable working cross-culturally and has gained trust with homebuyers and sellers even if she doesn’t speak the same language. Partnerships with bi-lingual colleagues and staff ensure communication is not an issue with Chinese clients. The sheer number of schools is another plus.
“Education is key with most of my clients. Los Angeles provides nearly a hundred four year degree colleges and universities to choose from. A Chinese family can transition here effortlessly surrounded by their culture and still make sure their priorities of education, investment and quality of life are met.”
The Chinese have definitely altered the landscape in Arcadia and other cities in Southern California. Fatima Malik understands their lifestyle and investment needs and motivation. Like homeowners and investors of all cultures, they’re willing to take a risk but they also want certainty and value as part of the reward.