Foreign investors in Southern California: Over half of new homes in Irvine purchased by Asian buyers. SoHo China CEO reluctant on buying overseas real estate. AirBnB and VRBO Irvine rentals.

Jon Blogosphere, Market Commentary, Real Estate

There is still a large amount of foreign money flowing into targeted markets for the direct purpose of purchasing real estate. Not cheap real estate but trophy properties. Usually when people get angry about the money flowing into some of these communities there is an underlying perception that they are being priced out. There is certainly a factor driving home prices up but are you going to buy that $1 million home when it hits $800,000? Most don’t have the funds to purchase $700,000 crap shacks let alone these trophy properties. A few readers sent over the data on Irvine new home sales where a new community sold roughly 80 percent of its properties to what appears to be foreign buyers. It is an easy process to ascertain these details because you can simply look at cash purchases. From what I gather, the vast majority of local professionals will need a mortgage to buy. Irvine has some interesting trends because there are new communities coming online that seem to fully focus on the foreign money trend. In Inception like fashion, the community that sold so well is ‘Arcadia’ in Irvine. As in an already foreign money focused area of Los Angeles now having a community built out in Irvine with the same name. Sort of like the Los Angeles Angels of Anaheim (Anaheim is in Orange County by the way).
Foreign money into Irvine real estate
First, a piece from the article:
‘(Bloomberg) Buyers from China and Asian-Americans purchased about 80 percent of the 47 houses sold at Tri Pointe Homes Inc.’s Arcadia at Stonegate community in Irvine, about 40 miles southeast of Los Angeles, according to Tom Mitchell, president of the Irvine-based builder.
Almost half of the buyers paid cash for houses in the development, at prices starting at $1.16 million, he said. The company has been surprised by how word travels among overseas buyers.
‘A Chinese national bought one of our houses at Arcadia in Irvine after reading about it on a blog,’ Tri Pointe CEO Doug Bauer said in a telephone interview. ‘It was a Chinese blog. We couldn’t even read it.’

This post was published at Doctor Housing Bubble on October 6th, 2015.