Say ni hao to your new neighbors. That three-bedroom, two-bath bungalow in Garland that just sold for $220,000 might very well have been purchased by a family from Chongqing. But don’t expect those buyers to relocate anytime soon—if ever.
“Usually the Chinese who are buying homes here are not buying a homestead,” says Ida Hung, a Dallas Realtor with Virginia Cook, Realtors who was born in Hong Kong and is doing a newly booming business, along with her partner at Virginia Cook, Scott Hogg. “The Chinese buyers don’t live in these houses most of the time. They’re often buying them sight unseen. What they can get for their money here is much better than what they can get in China and Hong Kong, so these are usually purely investments.”
Those investments have been increasing since 2014, a year in which Dallas’ home market was surging while China’s economic engine started to sputter. Since then, Texas has become the third-leading state behind Florida and California for Chinese investment in homes. And that investment is significant. Chinese nationals spent $28 billion buying homes in the United States last year, according to the National Association of Realtors.
Although the average price paid by a Chinese buyer for a U.S. home is $831,900, Hung says her buyers are drawn to Dallas over cities like San Francisco, New York, or Chicago because they want homes that are much more affordable—preferably between $200,000 and $300,000. Affordability matters: Chinese laws restrict individual citizens there from making more than $50,000 in annual investments overseas. Families—aunts, uncles, cousins—often pool their money to buy a home in the United States.
Most of those purchases are made in cash. Only one bank that Hung works with, Cathay Bank, offers loans to foreign nationals for U.S. home purchases. But buyers who bring cash have a big market advantage. “They can close much faster than someone with a loan, which helps them in this kind of market where we’re seeing multiple offers,” Hung says.
Once a home is purchased here, many Chinese buyers rent it out for a profit, looking to get about $1 a square foot for a home in the $200,000 to $300,000 range, before selling the home outright when prices go up. “Right now,” Hung says, “the Chinese buyers really believe they’re going to make good money investing in Dallas.”