Buyers from China No. 2 in US Real Estate Market

Buyers from China are second only to those from Canada in snapping up US houses at bargain prices in the wake of the financial crisis, according to the Yangtze Evening Post.

Buyers from China made up 9% of all foreign purchasers of US homes, followed by buyers from India, Mexico and Great Britain, according to a 2011 report by the National Association of Realtors. Canadian nationals topped the list.

During the 12 months leading up to March, foreign buyers spent $82 billion in US real estate, $16 billion more than during the previous 12 months, according to the report.

Buyers from China preferred houses in the western states while European buyers preferred the east and Mexicans the south.

Seventy percent of buyers from China chose California, followed by New York City and Miami, according to the association’s president Ronald Phipps.

Buyers from China tended to make all-cash purchases at a higher rate than the 62% average among foreign buyers. The preference for all-cash deals was attributed to a lack of knowledge about the US banking system. Also, because most buyers from China don’t have permanent resident status and are unable to get mortgage financing from banks.

Foreign buyers use their US homes as permanent residences (37%), vacation homes (28%), as rental property (16%) and for commercial investment (4%).