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"A penny for your thoughts"

Monday, March 2, 2009

Chinese House Hunters Tour U.S. in Search of Sweet Deal

On Feb. 24 a special Chinese tour group, the first organized group trip, is heading to the United States in search of cheap homes to buy. Price favourably declines in four major cities at Boston, New York, San Francisco and Los Angeles attracts the tourage for investment property and housing their children could use when they go to the USA to study or work with budget: $300,000 to $800,000 apiece.The bargain hunters are paying $3,600 each for the trip to, China's leading real estate website and the trip's organizer. These cities are chosen because of their large ethnic Chinese communities and because they have a large number of universities.

Cash-rich China, whose purchases of U.S. Treasury notes help prop up the federal government, is looking to recession-stricken America also for looking for U.S. firms on the skids at the right price. Including talent where headhunters have been scouring America's decimated financial sector mostly for ethnic Chinese executives. But houses are assets that individual Chinese with money can try to cash in on.

The Chinese view China is still a country run by the Communist Party, which inherently distrusts private property. The party's power is more than the rule of law. That is scary, and they cannot be sure about changes in the future. The U.S. market and social system are more stable.

Shen Yue, a Chinese film producer sees the U.S. subprime crisis positively where U.S. houses are down by 20% or 30% — even more than the price falls in China, where the Chinese may be a big help to Americans saddled with mortgages they cannot pay. He says there are several hundred thousand Chinese like him who easily can pay up to $500,000 for a house.

Dan Harris, a Seattle lawyer and co-writer of the popular China Law blog express concerns that the beliefs that by buying property in the U.S. will increase one chances of getting a visa is not true. Harris also worries Chinese buyers may end up with the wrong kind of bargain, such as a foreclosed crack-house(used by drug dealers or prostitutes). professor Wang Hongxin, director of the Real Estate Research Institute of Beijing Normal University warns that some of the group (of Chinese buyers) may underestimate the challenges of investing overseas, as they are unfamiliar with the U.S. culture and system. He also added that the Chinese real estate market has the greatest potential worldwide and though currently it is not as hot as in previous years, but the rates of return will still be higher than other markets.


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