Interview: Joseph Ho on mainland Chinese homebuyers contributing to Seattle's recovery, bringing values back up
By Wen Liu Oct. 11, 2016
With their pivoting away from Vancouver B.C. and its 15% tax on foreign national purchases, mainland Chinese homebuyers began zeroing in on Seattle with a deluge of inquiries, turning Seattle into their new No. 1 U.S. market. In a recent WCWD survey, respondents saw this new ranking of Seattle’s in various ways: good, bad, things would change with China’s slowing economy, or more measures of tracking needed, etc. Well, how does a real estate professional see it? Here we have Joseph Ho, Director of New Markets Development at Berkshire Hathaway HomeServices Northwest Real Estate, an award-winning 30-plus-year veteran in both residential and commercial markets, who has been interviewed about his work in the Seattle area by Bloomberg News, The Seattle Times, CCTV China News, and more.
WCWD: The Seattle Times said that Seattle had recently become the No. 1 U.S. market, or the most-inquired U.S. market, for mainland Chinese homebuyers, escaping the 15% tax in British Columbia. What does this new ranking mean?
Joseph Ho: It means Seattle is now more desirable for Chinese nationals. Real Estate values in Seattle are better than San Francisco and Vancouver. You can't buy much in those markets even with a million dollars.
WCWD: According to the Times, buyers from China bought about $1.6 billion in homes across Washington in 2015. What kind of homes do they usually buy, and why do they buy them, to immigrate here, to use as a vacation home, or as an investment?
Joseph Ho: Most of my clients are buying with public schools in mind. Bellevue and Mercer Island are favorites for families with children. Some clients look specifically at lake front properties; these tend to be second homes. Other clients buy as investments and rent the properties out. One client has purchased 6 single family homes as rentals.
WCWD: As also reported by the Times, home prices in Seattle rose 53% in the last four years, twice the national rate, with those in the Eastside twice the King County rate. So would you say that mainland Chinese homebuyers contributed to the ever-hotter Seattle market, making it harder for locals to buy a home?
Joseph Ho: It has made it a little more challenging for local Buyers to compete. But I am still able to help my local Buyers purchase if they are qualified. There are numerous Buyers from around the country that are moving here to fill the growing number of technology jobs. They are also absorbing the supply of homes available.
WCWD: With more Chinese companies investing or expanding into Washington state and more Chinese students attending Washington schools, etc., do you see more buyers from China snapping up homes in the Seattle area in coming years, causing a backlash and even a push for a Vancouver-like tax?
Joseph Ho: Yes, I think we will see this trend to continue for at least 3-5 more years. I doubt that we will see a tax like Vancouver. Sellers appreciate the fact that Chinese Buyers have helped to bring values back up from the recession. Politically I do not believe property owners want to devalue their property with such a tax. Vancouver has seen a 15-20% drop in property values since the tax was implemented.
WCWD: You have been in the real estate business for over 30 years and witnessed first-hand the spread of China's new wealth into the U.S., and Washington, in particular. Do you see this development as benefitting Washington as a whole, and how?
Joseph Ho: Chinese nationals entering our market for both residential and commercial properties have really helped our area to recover from the recession which started in the latter part of 2007. Our values now are back to the peak and some areas are even exceeding the height of the market. I have listings that are selling in a matter of days at higher prices than they would have sold for in 2007.
(For more information on major events in Washington state-China relations, go to WA China Chronicle.)