Chinese home buying in the United States was up more than 70% to $22 billion between March 2013 and April 2014, according to the National Association of Realtors
. California is the biggest market for the Chinese, accounting for a third of their U.S. purchases.
Arcadia, California, is home to 57,600 residents and the city predicts that about 150 older homes, 53% more than normal, will be torn down this year and replaced with mansions.
For home buyers from China, Arcadia offers all the qualities they are looking for in an area, such as excellent schools, large lots with lenient building codes, and a place to park their money beyond the reach of the Chinese government, according to Bloomberg
In China, mortgage rules only recently began to loosen. Previously, buyers of second homes were required to make a minimum 60% down payment to qualify for a loan. Now, such buyers can make a down payment of 30%, but that's still considerably more than the U.S. requirement.
The property market in China, coupled with a stronger currency, is also enticing Chinese millionaires to buy homes in America. Beijing no longer permits individuals to own more than two properties, even as an investment. So a growing number are going abroad as cash buyers.
Asian investor appetite grows for multifamily, too
Asian investors are also looking at multifamily properties in the San Francisco area. The group is on track to spend more on U.S. multifamily assets in 2014 than at any other time in history, according to commercial real estate
firm CBRE. Asian buyers have invested more than $326 million in San Francisco this year, followed by Los Angeles at $252 million and New York at $175 million, according to the firm. Overall, this group has completed $522 million in multifamily transactions from January through August.
The jump in buying activity by Asian investors, particularly from Japan and China, is the most significant shift in terms of buyer nationality in 2014, according to CBRE. Asian investors are now responsible for 18% of cross-regional multifamily investment in the U.S.—an increase of 8%—as purchases by European and Middle Eastern countries decline slightly. Canada continues to be the overall leader in foreign multifamily investment into the U.S.
You might like: Foreigners riding the U.S. real estate market up
Chinese investors are now the biggest international players in the U.S. housing market, and some states, like California, Washington and New York, are seeing billions of dollars in real estate deals as a result. In particular, Arcadia, a Los Angeles suburb, has seen an influx of wealthy investors from China tearing down old properties to build mansions in their places.