Newport Beach Home Prices Strong Due to International Demand
Newport Beach is a community where home prices benefited from international buyers and investors purchasing homes in the United States. They are attracted to luxury homes, they often pay all cash, and they are looking for second homes and vacation homes.
When George and Cheryl decided to sell their Orange County home, they planned for it to be on the market for a few months. George was surprised when it sold so fast. “Sold our home the first week to a man right off the plane from China. He didn’t speak a lick of English but he knew the universal language, $$. Never occupied house. Flipped two years later.”
It’s not an uncommon story. Newport Beach homes are in high demand and that’s good for home prices. It is one of the communities that have benefited from the growing trend of international buyers and investors purchasing homes in the United States. Simply put, the luxury market is a global market and Newport Beach is a luxury market.
International Supply and Demand
After the economic recession, Newport Beach high-end home prices were the slowest sector to recover, but it was International demand that finally brought the luxury home market in Newport Beach back to life.
NAR’s report on international buyers in 2015 revealed that, not only has the number of home purchases by international buyers reached record heights, the average home prices of homes purchased by this growing demographic is almost double the national average. In other words, international buyers are purchasing more homes and they are buying the higher-end homes. This additional demand has helped keep Newport Beach home values strong.
All Cash Buyers
Another reason international buyers have strengthened home prices in the local market is because they typically pay cash. Paying all cash means these buyers are not limited by traditional financing. During a time when jumbo loans have been unavailable, traditional buyers have found it difficult to purchase a high-end home. Cash buyers don’t have that limitation.
International buyers are also attracted to Newport Beach because their purchase is typically a second home or vacation home. Newport Beach is a second home destination. Some communities might have a non-owner occupancy rate of as much as 30 percent.
International buyers are also attracted to the quality of Newport Beach schools. They are not limited by the geographic location of their work, which allows them to choose location based on other factors. Of those other factors, schools rank extremely high. They look at school scores and they look at the availability of English as a second language opportunities.
Selling to an International Market
Newport Beach homeowners recognize this growing trend and have begun choosing agents who can reach this international audience. It’s not uncommon for a seller who is interviewing agents to ask what they can do to reach the international buyer. Sellers and agents have learned to pay closer attention to feng shui. It’s not uncommon to see 888 in an asking price in an attempt to make the property more attractive to a Chinese buyer who likes those lucky numbers.
Photo used with permission from photographer Tyler Bowman.
Paula PeltonFebruary 16, 2017
Tom’s right. International demand is high but now low inventory is holding us up. We’re about 16% below inventory levels last year at this time. We need Listings in Newport Beach.