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Chinese activity in U.S. real estate markets may be dropping

Every real estate transaction has its own unique circumstances. One thing that some such transactions involve is a buyer from another country. Many different things can drive foreign buyers to want to purchase homes or other property here in the U.S., including a desire to have an investment property in the country.

A real estate transaction having a foreign buyer is one of the things that can raise unique issues within a transaction. Real estate lawyers can help individuals navigate complex issues related to real estate deals involving foreign buyers or other real estate transactions.

In recent years, buyers from China have made up a substantial portion of foreign buyers of U.S. real estate. Over the past couple of years, no foreign country has had a higher amount of investment activity in U.S. real estate markets from its citizens than China. In the 12-month period that ended this March, U.S home purchases by Chinese buyers totaled to around $28.6 billion and, by dollar volume, made up around 2 percent of all U.S. home purchases. Southern California has seen a fair amount of real estate investment activity from Chinese buyers.

However, it appears that things, at least temporarily, may be changing quite a bit when it comes to investment activity in U.S. real estate markets by Chinese buyers. Recently, China has been experiencing stock market struggles and other economic issues. According to individuals in the real estate industry, these struggles and issues have caused some Chinese buyers to back off a bit from buying U.S. property and, along with other factors, could lead to drops in U.S. real estate investment activity by Chinese individuals in the near future. Many individuals in the real estate industry, however, believe this trend will likely only be a temporary one.

Changes in real estate investment activity by foreign buyers can sometimes have significant impacts in real estate markets here in the United States. What effects do you think the cooling of U.S. real estate investment activity by Chinese buyers will have on real estate markets here in Southern California?

Source: The Wall Street Journal, “Chinese Pull Back From U.S. Property Investments,” Laura Kusisto and Alyssa Abkowitz, Nov. 27, 2015

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