As mentioned on several of my prior blogs, Chinese buyers for North Orange County continue to dominate new construction and the high end market.
During the boom of 2003-2006, subprime lending fueled bidding wars as home prices reached levels where it was impossible to afford a nice home on a 30 year fixed mortgage — unless you were a Doctor, Lawyer or Executive of a company.
This time around, low interest rates, former homeowners who had a foreclosure or short sale seeking to purchase, low inventory, and increasing international buyers are pushing prices upward without an end in sight.
Before subprime and International Buyers, prices had to be inline with local wages.
With International Buyers continuing to purchase, is the Affordability Index becoming less relevant?
Here are a few significant stats from the Bloomberg Report below:
– The amount of millionaires in China have more than DOUBLED since 2008
– 60% of Chinese with $1.6M or more in assets are in process or considering emigration with the #1 destination (40%) being the U.S.
– Reasons for emigration: Children’s Education 58%, Wealth Safety 43%, Retirement 32%
– According to the Department of Homeland Security, Chinese ranked 2nd to Mexicans for receiving legal, permanent residency.
Recently, I observed a builder’s release at Coral Ridge in Blackstone. My client and I realized that the prices had gone up almost $200,000 from the last release. Almost everyone in the room were Chinese and eyeing one lot that sold for almost $1.6M.