Elizabeth Nunan brought some cultural preconceptions with her in July when she visited China for the first time for her Westchester real estate company. As vice president of global business development at Houlihan Lawrence, she traveled to the Chinese mainland with two sales associates from Houlihan Lawrence”™s Scarsdale and Armonk offices for whom the visit was a homecoming and a near-homecoming.
“We as a company have just started to put much more marketing efforts into attracting some high-end Chinese consumers” to Westchester”™s luxury residential market, Nunan said.
China is the fastest-growing source of international clients for residential real estate in the U.S., according to the National Association of Realtors, accounting for 16 percent of buyers here in a one-year period from 2013 through this year”™s first quarter. Drawn to some of the nation”™s highest-priced markets, Chinese consumers accounted for $22 billion in nationwide sales, or 24 percent of the $92.2 billion in total sales to international buyers for the year. In the prior year, Chinese buyers accounted for $12.8 billion in sales, or 19 percent of the $68.2 billion in real estate purchases by international clients.
In Shanghai, Nunan and her Houlihan Lawrence colleagues, Tianying Xu and Lesli Hammerschmidt, attended the Luxury Portfolio Immersion Conference, a three-day event designed to give professionals in the luxury homes market a deeper understanding of Chinese culture and traditions that might affect the choices in real estate made by wealthy Chinese. Xu is a native of China, where she earned a degree in civil engineering. Hammerschmidt, the daughter of a U.S. Agriculture Department official, was raised in Taiwan and Hong Kong, where she worked for a decade as an international relocation consultant.
The conference was sponsored by Luxury Portfolio International, a global network of more than 500 affiliated real estate firms that includes Houlihan Lawrence. A division of Chicago-based Reliance Relocation Services Inc., Luxury Portfolio on its website markets more than 25,000 high-end homes, with an average price of about $2.6 million, to more than 3 million high-net-worth visitors annually. Nunan said Houlihan Lawrence joined the network about nine years ago.
In Shanghai, Nunan and her colleagues met with executives at Juwai ”“ its Chinese name translates as “home overseas” ”“ a China-based company started by two Australians whose 3-year-old real estate portal, Juwai.com, has become a leading site for Chinese buyers searching for international real estate. Nunan said the Juwai site has 1.5 million views per month.
LuxuryPortfolio.com receives all Houlihan Lawrence listings of properties in Westchester, Putnam and Dutchess counties priced at $1 million and higher. In a new marketing venture that began in April for the Rye Brook-based company, those listings then are posted on Juwai.com to directly reach prospective Chinese buyers.
“That”™s kind of a new thing for us to test,” Nunan said. “It”™s a win-win for us, because it gives our sellers and our properties global exposure.”
Nunan learned some new things about those targeted Chinese consumers at the conference.
“I kind of went with the assumption that they would be interested in condo living” in the U.S., coming from a nation of crowded cities where, as she observed on her trip, “There are just high-rises everywhere.” But from statistics presented at the conference, “I learned that I was wrong.” Among recent Chinese buyers in the U.S. market, 70 percent preferred detached single-family homes, according to the 2014 report by the National Association of Realtors cited by Nunan. Only 12 percent of Chinese buyers here bought condos or apartments, according to the NAR report, which profiled international home-buying activity in the U.S. from April 2013 to March 2014.
“We have the suburbs, so it”™s a different way of life than they”™re used to,” Nunan said. “Many people like that, that they”™re different.” The NAR survey found that 46 percent of Chinese buyers preferred suburban homes, while 37 percent chose central city or urban residences.
Nunan said Chinese companies at the conference inquired about EB-5 visas, a U.S. State Department immigration program that offers a green card to any foreigner willing to invest at least $500,000 and create 10 jobs in America. CNNMoney in August reported the U.S for the first time had reached its annual 10,000-visa quota because of a surge in applications from Chinese citizens, who accounted for more than 80 percent of EB-5 visas issued in 2013.
From Shanghai, the Houlihan Lawrence team flew to Xi’an in northwest China, one of the country”™s oldest cities. Xi”™an will be the focus of Houlihan Lawrence”™s initial marketing efforts in China.
Houlihan Lawrence has a familiar link to the ancient Chinese city in Tianying Xu, who was raised there. Xu last year followed her Chinese Canadian husband, a medical student and now a physician in Westchester, from Toronto to Scarsdale. Xu sees her work as a broker at Houlihan Lawrence”™s Scarsdale office as part of her thorough education in residential real estate.
“Being a Realtor, you study and know different kinds of homes,” she said. “I really want to know everything.” It will prepare her for her next venture, the development company she plans to start with American construction partners and Chinese investors, she said.
Nunan said the Westchester team met in Xi”™an with potential corporate clients ”“ Chinese companies that have a presence in New York ”“ and banks, one of which agreed to make Houlihan Lawrence brochures for international buyers available in Mandarin to its private-banking clients. “It”™s a relationship that we hope to develop and grow,” she said.
Xu said her home city, with a booming economy and “lots of rich people” running its industries, is an opportune market for Houlihan Lawrence.
“Successful business owners, they really want to send their kids overseas and educate in America,” Xu said. One of her Chinese clients has rented a house for his wife and two children in Scarsdale while looking to buy a home in the “very tough” Scarsdale market where “everything goes very quickly,” she said.
“I believe it will bring in a lot of business,” Xu said of Houlihan Lawrence”™s new connection to Xi”™an. “The more we stay in the market, the more people know us.”
Nunan said one Chinese client was interested in a $2.5 million home in Scarsdale. Houlihan Lawrence also has had prospective Chinese buyers in Larchmont, Mamaroneck and Rye. “They are looking at $2 million or higher,” she said. The firm”™s sales agents have been seeing more Chinese at open houses, she said.
Compared with suburban Westchester, “Other parts of the country have seen faster and larger growth of the Chinese consumer,” Nunan said, citing San Francisco, Los Angeles and New York City. “We see this as a new market for us. We don”™t know where it will lead.”
